Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT
COMPANIES
Investment Company Act file number: 811-21198 and 811-21301
Name of Fund: BBIF Tax-Exempt Fund and Master Tax-Exempt LLC
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BBIF Tax-Exempt Fund and
Master Tax-Exempt LLC, 55 East 52nd Street, New York, NY 10055
Registrants’ telephone number, including area code: (800) 626-1960
Date of fiscal year end: 03/31/2014
Date of reporting period: 09/30/2013
Table of Contents
Item 1 – Report to Stockholders
Table of Contents
SEPTEMBER 30, 2013
SEMI-ANNUAL REPORT (UNAUDITED)
|  |
BBIF Tax-Exempt Fund
| Not FDIC Insured • May Lose Value • No Bank Guarantee |
Table of Contents
| Table of Contents |
| Page | ||||
| 3 | ||||
| 4 | ||||
| 5 | ||||
| 5 | ||||
| Fund Financial Statements: | ||||
| 6 | ||||
| 6 | ||||
| 7 | ||||
| 8 | ||||
| 12 | ||||
| 14 | ||||
| Master LLC Financial Statements: | ||||
| 15 | ||||
| 26 | ||||
| 26 | ||||
| 27 | ||||
| 27 | ||||
| 28 | ||||
Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement | 30 | |||
| 34 | ||||
| 35 | ||||
| 2 | BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 |
Table of Contents
| Dear Shareholder |
One year ago, financial markets were in a soft patch as global trade slowed, driven by a recession in Europe and decelerating growth in China. Volatility increased toward the end of 2012 due to growing concern that bipartisan gridlock in Washington, D.C. would preclude a timely resolution to US budget negotiations. Failure to reach an agreement before the end of the year would have triggered the “fiscal cliff” of pre-mandated tax increases and spending cuts as of the beginning of 2013, putting the US economy at risk for recession. The worst of the fiscal cliff was averted, however, with a last-minute tax deal, allowing markets to get off to a strong start in 2013. Money that had been pulled to the sidelines amid year-end tax-rate uncertainty poured back into the markets in January. Key indicators signaling modest but broad-based improvements in the world’s major economies, coupled with the absence of negative headlines from Europe, fostered an aura of comfort for investors. Global equities surged, while rising US Treasury yields pressured high quality fixed income assets. (Bond prices fall when yields rise.)
Global economic momentum slowed in February and the pace of the rally moderated. In the months that followed, US stocks outperformed international stocks, as the US recovery showed greater stability compared to most other regions. Slow, but positive, growth in the United States was sufficient to support corporate earnings, while uncomfortably high unemployment reinforced expectations that the Federal Reserve would keep interest rates low. International markets experienced higher levels of volatility given a resurgence of political instability in Italy, a severe banking crisis in Cyprus and a generally poor outlook for European economies. Emerging markets significantly lagged the rest of the world as growth in these economies, particularly in China and Brazil, fell short of expectations.
In May, comments from the Fed suggesting a possible reduction of its bond-buying stimulus program before the end of 2013 roiled markets around the world. Equities plummeted and a dramatic increase in US Treasury yields resulted in tumbling bond prices. Markets rebounded in late June when the tone of the US central bank turned more dovish. Improving economic indicators and a positive outlook for corporate earnings further boosted risk assets in July, with major US equity indices hitting new record highs.
Markets slumped again in August as investors became wary amid looming macro risks. Mixed economic data stirred up worries about global growth and renewed anxieties about when and how much the Fed would scale back on its asset purchase program. Additional volatility stemmed from the escalation of the revolution in Egypt and the civil war in Syria. These conflicts underscored the broader issue of rising geopolitical instability in the Middle East/North Africa region and put upward pressure on oil prices, creating an additional headwind for global economic growth.
September was surprisingly positive for investors thanks to the easing of several key risks. Most importantly, the Federal Reserve defied market expectations with its decision to maintain the current pace of its asset purchase program. Additionally, the more hawkish candidate to become the next Federal Reserve Chairman, Larry Summers, withdrew from the race. On the geopolitical front, the violence in Egypt subsided and the situation in Syria no longer appeared to warrant foreign military intervention. In Europe, the re-election of Angela Merkel as Chancellor of Germany was welcomed as a continuation of the status quo. These developments drove all asset classes generally higher for the month of September even though the final week of the month saw risk markets decline due to political wrangling over US fiscal policy, which ultimately led to a government shutdown at the close of the period.
Though we’ve seen periods of heightened uncertainty and market volatility over the past year, riskier asset classes generally outperformed lower-risk investments. Developed market equities generated the strongest returns for the 6- and 12-month periods ended September 30, 2013. Emerging markets, in contrast, struggled with slowing growth and weakening currencies. Rising interest rates resulted in poor performance for most fixed income assets, especially US Treasury bonds and other higher quality sectors such as tax-exempt municipals and investment grade corporate bonds. High yield bonds, on the other hand, generated positive returns as investors looked to the asset class for income in the low-rate environment. Short-term interest rates remained near zero, keeping yields on money market securities near historical lows.
At BlackRock, we believe investors need to think globally and extend their scope across a broader array of asset classes and be prepared to move freely as market conditions change over time. We encourage you to talk with your financial advisor and visit www.blackrock.com for further insight about investing in today’s world.
Sincerely,
Rob Kapito
President, BlackRock Advisors, LLC
“Though we’ve seen periods of heightened uncertainty and market volatility over the past year, riskier asset classes generally outperformed lower-risk investments.”
Rob Kapito
President, BlackRock Advisors, LLC
| Total Returns as of September 30, 2013 | ||||||||
| 6-month | 12-month | |||||||
US large cap equities | 8.31 | % | 19.34 | % | ||||
US small cap equities | 13.61 | 30.06 | ||||||
International equities | 10.47 | 23.77 | ||||||
Emerging market equities (MSCI Emerging Markets Index) | (2.78 | ) | 0.98 | |||||
3-month Treasury bill | 0.04 | 0.10 | ||||||
US Treasury securities | (5.19 | ) | (5.71 | ) | ||||
US investment grade | (1.77 | ) | (1.68 | ) | ||||
Tax-exempt municipal | (3.47 | ) | (2.25 | ) | ||||
US high yield bonds | 0.81 | 7.14 | ||||||
| Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index. | ||||||||
| THIS PAGE NOT PART OF YOUR FUND REPORT | 3 |
Table of Contents
| Money Market Overview |
| For the Six-Month Period Ended September 30, 2013 |
The Federal Open Market Committee (“FOMC”) maintained its target range for the federal funds rate at 0.00% to 0.25% throughout the six-month reporting period ended September 30, 2013. In late May, the FOMC made statements suggesting a possible reduction in the size of its monthly asset purchases from the current pace of $85 billion (a process known as “tapering”) beginning as early as the time of its policy meeting scheduled for September 18. A summer of mounting expectations that monetary stimulus would soon begin to wane ended with a surprising announcement following the September meeting of the FOMC that it would maintain its asset purchase program at the current pace. This decision was predicated on the recent tightening in financial conditions caused by a rise in long-term interest rates coupled with drags associated with fiscal policy, leading the FOMC to question the sustainability of growth without continued monetary accommodation. Also in its post-meeting comments, the FOMC stated that it will continue to monitor economic developments closely and will adjust the pace of purchases as it deems necessary to maintain the appropriate level of monetary policy accommodation to support a stronger economic recovery and help ensure that inflation trends to a rate consistent with the FOMC’s dual mandate. Financial markets reacted favorably as the expected commencement of tapering was delayed until at least later in the year. The yield on the 10-year US Treasury note fell 16 basis points on September 18 while equities rallied, with the Dow Jones Industrial Average up almost 1% for the day.
In the “Summary of Economic Projections” resulting from the FOMC’s September meeting, policymakers slightly lowered their forecasts for growth and the unemployment rate in 2014. Inflation expectations were also revised slightly lower despite running near historical lows. Against this backdrop, the FOMC reaffirmed its commitment to maintaining accommodative measures until the US labor market exhibits substantial improvement subject to continued price stability, noting that the Committee “anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6.5%, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2% longer-run goal, and longer-term inflation expectations continue to be well anchored.”
Economic activity expanded at a moderate pace in the second quarter of 2013, with US gross domestic product growing at an annualized rate of 2.5%. The US unemployment rate declined by 0.3% (from 7.6% to 7.3%) over the six months ended September 30, 2013. Despite this improvement, the underlying components remain weak. In particular, the employment-to-population ratio and the labor force participation rate fell to levels not witnessed since the late 1970s. The housing sector advanced. Despite higher mortgage rates, existing home sales increased 8% over the quarter, helping to buoy spending by households as well as businesses.
In Europe, policymakers faced with weak growth and acquiescent inflation maintained a bias toward easing throughout the period. Efforts from the European Central Bank (“ECB”) to resuscitate the eurozone economy with record-low interest rates met only limited success in lifting growth measures. At a recent press conference, ECB president Mario Draghi commented that the bank is willing to employ “all available instruments” to keep interest rates from rising and hurting the nascent recovery. He further hinted the bank would consider increasing liquidity with a third round of loans under the Long-Term Refinancing Operation program. In September, the currency bloc received a crucial vote of confidence with the decisive re-election of Chancellor Angela Merkel in Germany as it was seen as an endorsement by German voters of her strong support of the euro.
In US money markets, the FOMC’s decision to delay tapering its stimulus program had little impact on short-term yields as money market flows remained stable. However, London Interbank Offered Rates (“LIBOR”) notched lower over the six months due in large part to central bank liquidity measures coupled with decreasing supply in the money market space, with three-month LIBOR decreasing 0.03% to close at 0.25% as of September 30, 2013. Yields on US Treasury bills fell during the period amid a decreasing amount of bills outstanding. The 3-month Treasury bill yield moved lower by 0.07% to close the period at 0.01%. During the month of September, with no end in sight to the looming debt-ceiling impasse, 1-month Treasury bill yields exhibited increased volatility as some liquidity investors sought to avoid Treasury bills maturing in the second half of October when the national debt was projected to breach its statutory maximum. In late September, the Federal Reserve introduced a series of daily overnight fixed-rate reverse repurchase agreements (“repos”) with a maximum bid set at $500 million per approved counterparty. Near the end of the month, as the repo market was beginning to display signs of stress for lack of collateral, the Fed increased the maximum bid to $1 billion. This new facility provided $58 billion in repo transactions.
In the short-term tax-exempt market, yields rose steadily leading up to the April 15 tax filing deadline, and declined throughout the summer months due to strong cash inflows resulting from the reinvestment of bond coupon payments and maturities. This is a typical seasonal pattern for yields during this time as increased demand for variable rate demand notes (“VRDNs”) faces a decreased-supply environment. The benchmark Securities Industry and Financial Markets Association Index, which represents the average rate on seven-day, high-quality VRDN securities (as calculated by Municipal Market Data), reached a year-to-date high of 0.23% on April 17 and ended the period at 0.07% as of September 30, 2013.
As the FOMC’s easy monetary policy has kept rates on taxable overnight repos low by historical measures, demand for VRDN securities from taxable money funds continued to be strong in 2013. This put additional supply pressures on an already shrinking VRDN market and allowed the dealer community to maintain yields on VRDNs that continue to attract crossover buyers from the taxable market.
As state and local municipalities continue to limit spending and reduce debt, new-issue supply of one-year, fixed-rate notes remained diminished in 2013. Municipalities began their annual issuance of one-year notes in June. Generally speaking, municipal money market funds take advantage of “note season” to extend their weighted average maturity, pick up yield, and diversify beyond bank exposure. The municipal yield curve continued to be extremely flat with longer-dated one-year municipal notes yielding 0.18% as of September 30, 2013, representing only a nominal premium for the extension risk over VRDNs.
Tax-exempt money fund industry assets, although down 3.4% for the six-month period, stabilized in the third quarter at $263 billion as of September 30, 2013.
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.
| 4 | BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 |
Table of Contents
| Fund Information as of September 30, 2013 |
| Investment Objective |
BBIF Tax-Exempt Fund’s (the “Fund”) investment objective is to seek current income exempt from federal income tax, preservation of capital and liquidity.
| Current Seven-Day Yields |
| 7-Day SEC Yields | 7-Day Yields | |||||||
Class 1 | 0.00 | % | 0.00 | % | ||||
Class 2 | 0.00 | % | 0.00 | % | ||||
Class 3 | 0.00 | % | 0.00 | % | ||||
Class 4 | 0.00 | % | 0.00 | % | ||||
The 7-Day SEC Yields may differ from the 7-Day Yields shown above due to the fact that the 7-Day SEC Yields exclude distributed capital gains.
Past performance is not indicative of future results.
| Disclosure of Expenses |
Shareholders of the Fund may incur the following charges: (a) transactional expenses such as sales charges; and (b) operating expenses, including administration fees, service and distribution fees, including 12b-1 fees, and other Fund expenses. The expense example shown below (which is based on a hypothetical investment of $1,000 invested on April 1, 2013 and held through September 30, 2013) is intended to assist shareholders both in calculating expenses based on an investment in the Fund and in comparing these expenses with similar costs of investing in other mutual funds.
The expense example provides information about actual account values and actual expenses. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 and then multiply the result by the number corresponding to their share class under the heading entitled “Expenses Paid During the Period.”
The expense example also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. In order to assist shareholders in comparing the ongoing expenses of investing in the Fund and other funds, compare the 5% hypothetical example with the 5% hypothetical examples that appear in other funds’ shareholder reports.
The expenses shown in the expense example are intended to highlight shareholders’ ongoing costs only and do not reflect any transactional expenses, such as sales charges, if any. Therefore, the hypothetical example is useful in comparing ongoing expenses only, and will not help shareholders determine the relative total expenses of owning different funds. If these transactional expenses were included, shareholder expenses would have been higher.
| Expense Example |
| Actual | Hypothetical2 | |||||||||||||||||||||||||||
| Beginning Account Value April 1, 2013 | Ending Account Value September 30, 2013 | Expenses Paid During the Period1 | Beginning Account Value April 1, 2013 | Ending Account Value September 30, 2013 | Expenses Paid During the Period1 | Annualized Expense Ratio | ||||||||||||||||||||||
Class 1 | $ | 1,000.00 | $ | 1,000.00 | $ | 0.85 | $ | 1,000.00 | $ | 1,024.22 | �� | $ | 0.86 | 0.17 | % | |||||||||||||
Class 2 | $ | 1,000.00 | $ | 1,000.00 | $ | 0.80 | $ | 1,000.00 | $ | 1,024.27 | $ | 0.81 | 0.16 | % | ||||||||||||||
Class 3 | $ | 1,000.00 | $ | 1,000.00 | $ | 0.80 | $ | 1,000.00 | $ | 1,024.27 | $ | 0.81 | 0.16 | % | ||||||||||||||
Class 4 | $ | 1,000.00 | $ | 1,000.00 | $ | 0.80 | $ | 1,000.00 | $ | 1,024.27 | $ | 0.81 | 0.16 | % | ||||||||||||||
| 1 | For each class of the Fund, expenses are equal to the annualized net expense ratio for the class, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period shown). Because the Fund is a feeder fund, the expense example reflects the net expenses of both the Fund and the master fund in which it invests. |
| 2 | Hypothetical 5% annual return before expenses is calculated by pro rating the number of days in the most recent fiscal half year divided by 365. |
| BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 | 5 |
Table of Contents
| Statement of Assets and Liabilities |
| September 30, 2013 (Unaudited) | BBIF Tax-Exempt Fund |
| Assets | ||||
Investments at value — Master Tax-Exempt LLC (the “Master LLC”) | $ | 370,337,885 | ||
Capital shares sold receivable | 14,163,474 | |||
|
| |||
Total assets | 384,501,359 | |||
|
| |||
| Liabilities | ||||
Capital shares redeemed payable | 12,746,219 | |||
Contributions payable to the Master LLC | 1,417,255 | |||
Officer’s fees payable | 86 | |||
Other accrued expenses payable | 55,918 | |||
|
| |||
Total liabilities | 14,219,478 | |||
|
| |||
Net Assets | $ | 370,281,881 | ||
|
| |||
| Net Assets Consist of | ||||
Paid-in capital | $ | 370,260,918 | ||
Undistributed net investment income | 610 | |||
Accumulated net realized gain allocated from the Master LLC | 20,353 | |||
|
| |||
Net Assets | $ | 370,281,881 | ||
|
| |||
| Net Asset Values | ||||
Class 1 — Based on net assets of $27,199,919 and 27,190,725 shares outstanding, unlimited number of shares authorized, par value $0.10 per share | $ | 1.00 | ||
|
| |||
Class 2 — Based on net assets of $45,795,630 and 45,778,295 shares outstanding, unlimited number of shares authorized, par value $0.10 per share | $ | 1.00 | ||
|
| |||
Class 3 — Based on net assets of $125,990,799 and 125,942,446 shares outstanding, unlimited number of shares authorized, par value $0.10 per share | $ | 1.00 | ||
|
| |||
Class 4 — Based on net assets of $171,295,533 and 171,232,109 shares outstanding, unlimited number of shares authorized, par value $0.10 per share | $ | 1.00 | ||
|
|
| Statement of Operations |
| Six Months Ended September 30, 2013 (Unaudited) | BBIF Tax-Exempt Fund |
| Investment Income | ||||
Net investment income allocated from the Master LLC: | ||||
Interest | $ | 302,698 | ||
Expenses | (320,226 | ) | ||
Fees waived | 154,468 | |||
|
| |||
Total income | 136,940 | |||
|
| |||
| Fund Expenses | ||||
Administration | 460,464 | |||
Service and distribution — Class 1 | 131,276 | |||
Service and distribution — Class 2 | 155,672 | |||
Service and distribution — Class 3 | 239,620 | |||
Service and distribution — Class 4 | 309,023 | |||
Transfer agent — Class 1 | 6,280 | |||
Transfer agent — Class 2 | 2,096 | |||
Transfer agent — Class 3 | 4,540 | |||
Transfer agent — Class 4 | 6,078 | |||
Registration | 95,020 | |||
Professional | 16,781 | |||
Printing | 9,837 | |||
Officer | 55 | |||
Miscellaneous | 7,828 | |||
|
| |||
Total expenses | 1,444,570 | |||
Less fees waived by administrator | (453,564 | ) | ||
Less service and distribution fees waived — Class 1 | (131,276 | ) | ||
Less service and distribution fees waived — Class 2 | (155,672 | ) | ||
Less service and distribution fees waived — Class 3 | (239,620 | ) | ||
Less service and distribution fees waived — Class 4 | (309,023 | ) | ||
Transfer agent fees reimbursed — Class 1 | (6,280 | ) | ||
Transfer agent fees reimbursed — Class 2 | (2,096 | ) | ||
Transfer agent fees reimbursed — Class 3 | (4,540 | ) | ||
Transfer agent fees reimbursed — Class 4 | (6,078 | ) | ||
|
| |||
Total expenses after fees waived and reimbursed | 136,421 | |||
|
| |||
Net investment income | 519 | |||
|
| |||
| Realized Gain Allocated from the Master LLC | ||||
Net realized gain from investments | 12,726 | |||
|
| |||
Net Increase in Net Assets Resulting from Operations | $ | 13,245 | ||
|
|
| See Notes to Financial Statements. | ||||||
| 6 | BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 | ||||
Table of Contents
| Statements of Changes in Net Assets | BBIF Tax-Exempt Fund |
| Six Months Ended September 30, | Year Ended March 31, 2013 | |||||||
| Increase (Decrease) in Net Assets: | 2013 (Unaudited) | |||||||
| Operations | ||||||||
Net investment income | $ | 519 | $ | 188 | ||||
Net realized gain | 12,726 | 7,627 | ||||||
|
| |||||||
Net increase in net assets resulting from operations | 13,245 | 7,815 | ||||||
|
| |||||||
| Dividends and Distributions to Shareholders From | ||||||||
Net investment income: | ||||||||
Class 1 | (5 | ) | (13 | )1 | ||||
Class 2 | (9 | ) | (27 | )1 | ||||
Class 3 | (26 | ) | (64 | )1 | ||||
Class 4 | (34 | ) | (84 | )1 | ||||
| Net realized gain: | ||||||||
Class 1 | — | (626 | )1 | |||||
Class 2 | — | (1,448 | )1 | |||||
Class 3 | — | (4,021 | )1 | |||||
Class 4 | — | (4,813 | )1 | |||||
|
| |||||||
Decrease in net assets resulting from dividends and distributions to shareholders | (74 | ) | (11,096 | ) | ||||
|
| |||||||
| Capital Share Transactions | ||||||||
Net increase (decrease) in net assets derived from capital share transactions | 3,718,611 | (169,484,006 | ) | |||||
|
| |||||||
| Net Assets | ||||||||
Total increase (decrease) in net assets | 3,731,782 | (169,487,287 | ) | |||||
Beginning of period | 366,550,099 | 536,037,386 | ||||||
|
| |||||||
End of period | $ | 370,281,881 | $ | 366,550,099 | ||||
|
| |||||||
Undistributed net investment income, end of period | $ | 610 | $ | 165 | ||||
|
| |||||||
| 1 | Dividends and distributions are determined in accordance with federal income tax regulations. |
| See Notes to Financial Statements. | ||||||
| BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 | 7 | ||||
Table of Contents
| Financial Highlights | BBIF Tax-Exempt Fund |
| Class 1 | ||||||||||||||||||||||||
| Six Months Ended September 30, 2013 (Unaudited) | Year Ended March 31, | |||||||||||||||||||||||
| 2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||||||
| Per Share Operating Performance | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||||||||
|
| |||||||||||||||||||||||
Net investment income | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | 0.0003 | 0.0051 | ||||||||||||||
Net realized gain | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | ||||||||||||
|
| |||||||||||||||||||||||
Net increase from investment operations | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0003 | 0.0051 | ||||||||||||||||||
|
| |||||||||||||||||||||||
| Dividends and distributions from: | ||||||||||||||||||||||||
Net investment income | (0.0000 | )2 | (0.0000 | )2,3 | (0.0001 | )3 | (0.0000 | )2,3 | (0.0003 | )3 | (0.0051 | )3 | ||||||||||||
Net realized gain | — | (0.0000 | )2,3 | (0.0000 | )2,3 | (0.0000 | )2,3 | — | — | |||||||||||||||
|
| |||||||||||||||||||||||
Total dividends and distributions | (0.0000 | ) | (0.0000 | ) | (0.0001 | ) | (0.0000 | ) | (0.0003 | ) | (0.0051 | ) | ||||||||||||
|
| |||||||||||||||||||||||
Net asset value, end of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||||||||
|
| |||||||||||||||||||||||
| Total Investment Return4 | ||||||||||||||||||||||||
Based on net asset value | 0.00% | 5 | 0.00% | 0.01% | 0.00% | 0.03% | 0.51% | |||||||||||||||||
|
| |||||||||||||||||||||||
| Ratios to Average Net Assets6 | ||||||||||||||||||||||||
Total expenses | 1.45% | 7,8 | 1.53% | 7 | 1.52% | 7 | 1.53% | 1.52% | 1.55% | |||||||||||||||
|
| |||||||||||||||||||||||
Total expenses after fees waived and reimbursed | 0.17% | 7,8 | 0.24% | 7 | 0.24% | 7 | 0.41% | 0.54% | 1.30% | |||||||||||||||
|
| |||||||||||||||||||||||
Net investment income | 0.00% | 7,8 | 0.00% | 7 | 0.00% | 7 | 0.00% | 0.03% | 0.46% | |||||||||||||||
|
| |||||||||||||||||||||||
| Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 27,200 | $ | 46,498 | $ | 22,689 | $ | 23,650 | $ | 33,099 | $ | 35,937 | ||||||||||||
|
| |||||||||||||||||||||||
| 1 | Amount is less than $0.00005 per share. |
| 2 | Amount is greater than $(0.00005) per share. |
| 3 | Dividends and distributions are determined in accordance with federal income tax regulations. |
| 4 | Where applicable, total investment returns assume the reinvestment of dividends and distributions. |
| 5 | Aggregate total investment return. |
| 6 | Includes the Fund’s share of the Master LLC’s allocated expenses and/or net investment income. |
| 7 | For the six months ended September 30, 2013 and the years ended March 31, 2013 and March 31, 2012, includes the Fund’s share of the Master LLC’s allocated fees waived of 0.08%, 0.09% and 0.03%, respectively. |
| 8 | Annualized. |
| See Notes to Financial Statements. | ||||||
| 8 | BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 | ||||
Table of Contents
| Financial Highlights (continued) | BBIF Tax-Exempt Fund |
| Class 2 | ||||||||||||||||||||||||
| Six Months Ended September 30, 2013 (Unaudited) | Year Ended March 31, | |||||||||||||||||||||||
| 2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||||||
| Per Share Operating Performance | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||||||||
|
| |||||||||||||||||||||||
Net investment income | 0.0000 | 1 | 0.0000 | 1 | 0.0001 | 0.0004 | 0.0004 | 0.0093 | ||||||||||||||||
Net realized gain | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | ||||||||||||
|
| |||||||||||||||||||||||
Net increase from investment operations | 0.0000 | 0.0000 | 0.0001 | 0.0004 | 0.0004 | 0.0093 | ||||||||||||||||||
|
| |||||||||||||||||||||||
| Dividends and distributions from: | ||||||||||||||||||||||||
Net investment income | (0.0000 | )2 | (0.0000 | )2,3 | (0.0001 | )3 | (0.0004 | )3 | (0.0004 | )3 | (0.0093 | )3 | ||||||||||||
Net realized gain | — | (0.0000 | )2,3 | (0.0000 | )2,3 | (0.0000 | )2,3 | — | — | |||||||||||||||
|
| |||||||||||||||||||||||
Total dividends and distributions | (0.0000 | ) | (0.0000 | ) | (0.0001 | ) | (0.0004 | ) | (0.0004 | ) | (0.0093 | ) | ||||||||||||
|
| |||||||||||||||||||||||
Net asset value, end of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||||||||
|
| |||||||||||||||||||||||
| Total Investment Return4 | ||||||||||||||||||||||||
Based on net asset value | 0.00% | 5 | 0.00% | 0.01% | 0.04% | 0.04% | 0.93% | |||||||||||||||||
|
| |||||||||||||||||||||||
| Ratios to Average Net Assets6 | ||||||||||||||||||||||||
Total expenses | 1.09% | 7,8 | 1.17% | 7 | 1.15% | 7 | 1.17% | 1.17% | 1.22% | |||||||||||||||
|
| |||||||||||||||||||||||
Total expenses after fees waived and reimbursed | 0.16% | 7,8 | 0.24% | 7 | 0.24% | 7 | 0.37% | 0.53% | 0.90% | |||||||||||||||
|
| |||||||||||||||||||||||
Net investment income | 0.00% | 7,8 | 0.00% | 7 | 0.00% | 7 | 0.04% | 0.04% | 0.94% | |||||||||||||||
|
| |||||||||||||||||||||||
| Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 45,796 | $ | 46,969 | $ | 93,113 | $ | 120,548 | $ | 152,771 | $ | 168,665 | ||||||||||||
|
| |||||||||||||||||||||||
| 1 | Amount is less than $0.00005 per share. |
| 2 | Amount is greater than $(0.00005) per share. |
| 3 | Dividends and distributions are determined in accordance with federal income tax regulations. |
| 4 | Where applicable, total investment returns assume the reinvestment of dividends and distributions. |
| 5 | Aggregate total investment return. |
| 6 | Includes the Fund’s share of the Master LLC’s allocated expenses and/or net investment income. |
| 7 | For the six months ended September 30, 2013 and the years ended March 31, 2013 and March 31, 2012, includes the Fund’s share of the Master LLC’s allocated fees waived of 0.08%, 0.09% and 0.03%, respectively. |
| 8 | Annualized. |
| See Notes to Financial Statements. | ||||||
| BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 | 9 | ||||
Table of Contents
| Financial Highlights (continued) | BBIF Tax-Exempt Fund |
| Class 3 | ||||||||||||||||||||||||
| Six Months Ended September 30, 2013 (Unaudited) | Year Ended March 31, | |||||||||||||||||||||||
| 2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||||||
| Per Share Operating Performance | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||||||||
|
| |||||||||||||||||||||||
Net investment income | 0.0000 | 1 | 0.0000 | 1 | 0.0001 | 0.0004 | 0.0008 | 0.0125 | ||||||||||||||||
Net realized gain | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | ||||||||||||
|
| |||||||||||||||||||||||
Net increase from investment operations | 0.0000 | 0.0000 | 0.0001 | 0.0004 | 0.0008 | 0.0125 | ||||||||||||||||||
|
| |||||||||||||||||||||||
| Dividends and distributions from: | ||||||||||||||||||||||||
Net investment income | (0.0000 | )2 | (0.0000 | )2,3 | (0.0001 | )3 | (0.0004 | )3 | (0.0008 | )3 | (0.0125 | )3 | ||||||||||||
Net realized gain | — | (0.0000 | )2,3 | (0.0000 | )2,3 | (0.0000 | )2,3 | — | — | |||||||||||||||
|
| |||||||||||||||||||||||
Total dividends and distributions | (0.0000 | ) | (0.0000 | ) | (0.0001 | ) | (0.0004 | ) | (0.0008 | ) | (0.0125 | ) | ||||||||||||
|
| |||||||||||||||||||||||
Net asset value, end of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||||||||
|
| |||||||||||||||||||||||
| Total Investment Return4 | ||||||||||||||||||||||||
Based on net asset value | 0.00% | 5 | 0.00% | 0.01% | 0.04% | 0.08% | 1.26% | |||||||||||||||||
|
| |||||||||||||||||||||||
| Ratios to Average Net Assets6 | ||||||||||||||||||||||||
Total expenses | 0.79% | 7,8 | 0.87% | 7 | 0.84% | 7 | 0.87% | 0.86% | 0.92% | |||||||||||||||
|
| |||||||||||||||||||||||
Total expenses after fees waived and reimbursed | 0.16% | 7,8 | 0.24% | 7 | 0.24% | 7 | 0.37% | 0.48% | 0.58% | |||||||||||||||
|
| |||||||||||||||||||||||
Net investment income | 0.00% | 7,8 | 0.00% | 7 | 0.00% | 7 | 0.04% | 0.09% | 1.24% | |||||||||||||||
|
| |||||||||||||||||||||||
| Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 125,991 | $ | 139,022 | $ | 223,118 | $ | 289,418 | $ | 405,215 | $ | 480,247 | ||||||||||||
|
| |||||||||||||||||||||||
| 1 | Amount is less than $0.00005 per share. |
| 2 | Amount is greater than $(0.00005) per share. |
| 3 | Dividends and distributions are determined in accordance with federal income tax regulations. |
| 4 | Where applicable, total investment returns assume the reinvestment of dividends and distributions. |
| 5 | Aggregate total investment return. |
| 6 | Includes the Fund’s share of the Master LLC’s allocated expenses and/or net investment income. |
| 7 | For the six months ended September 30, 2013 and the years ended March 31, 2013 and March 31, 2012, includes the Fund’s share of the Master LLC’s allocated fees waived of 0.08%, 0.09% and 0.03%, respectively. |
| 8 | Annualized. |
| See Notes to Financial Statements. | ||||||
| 10 | BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 | ||||
Table of Contents
| Financial Highlights (concluded) | BBIF Tax-Exempt Fund |
| Class 4 | ||||||||||||||||||||||||
| Six Months Ended September 30, 2013 (Unaudited) | Year Ended March 31, | |||||||||||||||||||||||
| 2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||||||
| Per Share Operating Performance | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||||||||
|
| |||||||||||||||||||||||
Net investment income | 0.0000 | 1 | 0.0000 | 1 | 0.0001 | 0.0004 | 0.0008 | 0.0125 | ||||||||||||||||
Net realized and unrealized gain | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | 0.0000 | 1 | ||||||||||||
|
| |||||||||||||||||||||||
Net increase from investment operations | 0.0000 | 0.0000 | 0.0001 | 0.0004 | 0.0008 | 0.0125 | ||||||||||||||||||
|
| |||||||||||||||||||||||
| Dividends and distributions from: | ||||||||||||||||||||||||
Net investment income | (0.0000 | )2 | (0.0000 | )2,3 | (0.0001 | )3 | (0.0004 | )3 | (0.0008 | )3 | (0.0125 | )3 | ||||||||||||
Net realized gain | — | (0.0000 | )2,3 | (0.0000 | )2,3 | (0.0000 | )2,3 | — | — | |||||||||||||||
|
| |||||||||||||||||||||||
Total dividends and distributions | (0.0000 | ) | (0.0000 | ) | (0.0001 | ) | (0.0004 | ) | (0.0008 | ) | (0.0125 | ) | ||||||||||||
|
| |||||||||||||||||||||||
Net asset value, end of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||||||||
|
| |||||||||||||||||||||||
| Total Investment Return4 | ||||||||||||||||||||||||
Based on net asset value | 0.00% | 5 | 0.00% | 0.01% | 0.04% | 0.08% | 1.26% | |||||||||||||||||
|
| |||||||||||||||||||||||
| Ratios to Average Net Assets6 | ||||||||||||||||||||||||
Total expenses | 0.79% | 7,8 | 0.86% | 7 | 0.84% | 7 | 0.85% | 0.86% | 0.91% | |||||||||||||||
|
| |||||||||||||||||||||||
Total expenses after fees waived and reimbursed | 0.16% | 7,8 | 0.24% | 7 | 0.24% | 7 | 0.36% | 0.48% | 0.58% | |||||||||||||||
|
| |||||||||||||||||||||||
Net investment income | 0.00% | 7,8 | 0.00% | 7 | 0.00% | 7 | 0.04% | 0.09% | 1.22% | |||||||||||||||
|
| |||||||||||||||||||||||
| Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 171,296 | $ | 134,061 | $ | 197,117 | $ | 336,880 | $ | 297,960 | $ | 395,636 | ||||||||||||
|
| |||||||||||||||||||||||
| 1 | Amount is less than $0.00005 per share. |
| 2 | Amount is greater than $(0.00005) per share. |
| 3 | Dividends and distributions are determined in accordance with federal income tax regulations. |
| 4 | Where applicable, total investment returns assume the reinvestment of dividends and distributions. |
| 5 | Aggregate total investment return. |
| 6 | Includes the Fund’s share of the Master LLC’s allocated expenses and/or net investment income. |
| 7 | For the six months ended September 30, 2013 and the years ended March 31, 2013 and March 31, 2012, includes the Fund’s share of the Master LLC’s allocated fees waived of 0.08%, 0.09% and 0.03%, respectively. |
| 8 | Annualized. |
| See Notes to Financial Statements. | ||||||
| BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 | 11 | ||||
Table of Contents
| Notes to Financial Statements (Unaudited) | BBIF Tax-Exempt Fund |
1. Organization:
BBIF Tax-Exempt Fund (the “Fund”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, open-end management investment company. The Fund is organized as a Massachusetts business trust. The Fund seeks to achieve its investment objective by investing all of its assets in Master Tax-Exempt LLC (the “Master LLC”), an affiliate of the Fund, which has the same investment objective and strategies as the Fund. The Master LLC is organized as a Delaware limited liability company. The value of the Fund’s investment in the Master LLC reflects the Fund’s proportionate interest in the net assets of the Master LLC. The performance of the Fund is directly affected by the performance of the Master LLC. The percentage of the Master LLC owned by the Fund at September 30, 2013 was 12.8%. The financial statements of the Master LLC, including the Schedule of Investments, are included elsewhere in this report and should be read in conjunction with the Fund’s financial statements. The Fund offers multiple classes of shares, designated Class 1, Class 2, Class 3 and Class 4 Shares. All classes of shares have identical voting, dividend, liquidation and other rights and the same terms and conditions, except that each class bears certain expenses related to the shareholder servicing and distribution of such shares and the additional incremental transfer agency costs resulting from the conversion of shares. Each class has exclusive voting rights with respect to matters relating to its shareholder servicing and distribution expenditures. The Board of Trustees of the Fund and the Board of Directors of the Master LLC are referred to throughout this report as the “Board of Directors” or the “Board” and the members are referred to as “Directors”.
2. Significant Accounting Policies:
The Fund’s financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the Fund:
Valuation: US GAAP defines fair value as the price the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Fund records its investment in the Master LLC at fair value based on the Fund’s proportionate interest in the net assets of the Master LLC. Valuation of securities held by the Master LLC is discussed in Note 2 of the Master LLC’s Notes to Financial Statements, which are included elsewhere in this report. The Fund seeks to maintain its net asset value per share at $1.00, although there is no assurance that it will be able to do so on a continuing basis.
Investment Transactions and Investment Income: For financial reporting purposes, contributions to and withdrawals from the Master LLC are accounted on a trade date basis. The Fund records daily its proportionate share of the Master LLC’s income, expenses and realized and unrealized gains and losses. In addition, the Fund accrues its own income and expenses. Income, expenses and realized and unrealized gains and losses are allocated daily to each class based on its relative net assets.
Dividends and Distributions: Dividends from net investment income are declared and reinvested daily. Distributions of capital gains are recorded on the ex-dividend date. The character and timing of dividends and distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP.
Income Taxes: It is the Fund’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required.
The Fund files US federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Fund’s US federal tax returns remains open for each of the four years ended March 31, 2013. The statutes of limitations on the Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction. Management does not believe there are any uncertain tax positions that require recognition of a tax liability.
Other: Expenses directly related to the Fund or its classes are charged to the Fund or class. Other operating expenses shared by several funds are pro rated among those funds on the basis of relative net assets or other appropriate methods. Expenses directly related to the Fund and other shared expenses pro rated to the Fund are allocated daily to each class based on its relative net assets or other appropriate methods.
The Fund may earn interest on positive cash balances in demand deposit accounts that are maintained by the transfer agent on behalf of the Fund. The amount, if any, is shown as income in the Statement of Operations.
3. Administration Agreement and Other Transactions with Affiliates:
The PNC Financial Services Group, Inc. (“PNC”) is the largest stockholder and an affiliate, for 1940 Act purposes, of BlackRock, Inc. (“BlackRock”).
The Fund entered into an Administration Agreement with BlackRock Advisors, LLC (the “Administrator”), an indirect, wholly owned subsidiary of BlackRock, to provide administrative services (other than investment advice and related portfolio activities). For such services, the Fund pays
| 12 | BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 |
Table of Contents
| Notes to Financial Statements (concluded) | BBIF Tax-Exempt Fund |
the Administrator a monthly fee at an annual rate of 0.25% of the average daily value of the Fund’s net assets. The Fund does not pay an investment advisory fee or investment management fee.
The Fund entered into a Distribution Agreement and separate Distribution Plans with BlackRock Investments, LLC (“BRIL”), an affiliate of the Administrator. Pursuant to the Distribution Plans and in accordance with Rule 12b-1 under the 1940 Act, the Fund pays BRIL ongoing service and distribution fees. The fees are accrued daily and paid monthly at annual rates based upon the average daily net assets of the shares of the Fund as follows:
Service Fee | Distribution Fee | |||||||
Class 1 | 0.25 | % | 0.750 | % | ||||
Class 2 | 0.25 | % | 0.425 | % | ||||
Class 3 | 0.25 | % | 0.125 | % | ||||
Class 4 | 0.25 | % | 0.125 | % | ||||
Pursuant to sub-agreements with BRIL, broker-dealers and BRIL provide shareholder servicing and distribution services to the Fund. The ongoing service and/or distribution fee compensates BRIL and each broker-dealer for providing shareholder servicing and/or distribution related services to Class 1, Class 2, Class 3 and Class 4 shareholders.
The Fund entered into a contractual arrangement with the Administrator and BRIL to waive and/or reimburse a portion of the Fund’s direct fees and expenses, which excludes fees and expenses allocated from the Master LLC, to ensure that the net expenses for the Fund’s Class 2 Shares are 0.35% higher than those of BIF Tax-Exempt Fund, and the net expenses for the Fund’s Class 3 and Class 4 Shares are equal to those of BIF Tax-Exempt Fund, without giving effect to any voluntary fee waivers. The fee/expense waiver includes service and distribution fees. The Administrator and BRIL have agreed not to reduce or discontinue this contractual waiver or reimbursement until August 1, 2014 unless approved by the Board, including a majority of the independent Directors. These amounts are included in service and distribution fees waived — class specific in the Statement of Operations.
The Administrator and BRIL voluntarily agreed to waive a portion of their respective administration and service and distribution fees and/or reimburse operating expenses to enable the Fund to maintain minimum levels of daily net investment income. These amounts are reported in the Statement of Operations as fees waived by administrator, service and distribution fees waived — class specific and transfer agent fees reimbursed — class specific. The Administrator and BRIL may discontinue the waiver or reimbursement at any time.
Certain officers and/or directors of the Fund are officers and/or directors of BlackRock or its affiliates. The Fund reimburses the Administrator for a portion of the compensation paid to the Fund’s Chief Compliance Officer, which is included in officer and directors in the Statement of Operations.
4. Capital Share Transactions:
The number of shares sold, reinvested and redeemed corresponds to the net proceeds from the sale of shares, reinvestment of dividends and distributions and cost of shares redeemed, respectively, since shares are sold and redeemed at $1.00 per share.
Transactions in capital shares for each class were as follows:
| Six Months Ended September 30, 2013 | Year Ended March 31, 2013 | |||||||
| Class 1 | ||||||||
Shares sold | 143,622,733 | 355,999,169 | ||||||
Shares issued to shareholders in reinvestment of dividends and distributions | — | 626 | ||||||
Shares redeemed | (162,914,210 | ) | (332,203,443 | ) | ||||
|
|
|
| |||||
Net increase (decrease) | (19,291,477 | ) | 23,796,352 | |||||
|
|
|
| |||||
| Class 2 | ||||||||
Shares sold | 122,320,042 | 395,625,266 | ||||||
Shares issued to shareholders in reinvestment of dividends and distributions | — | 1,448 | ||||||
Shares redeemed | (123,495,125 | ) | (441,770,877 | ) | ||||
|
|
|
| |||||
Net decrease | (1,175,083 | ) | (46,144,163 | ) | ||||
|
|
|
| |||||
| Class 3 | ||||||||
Shares sold | 365,709,209 | 1,104,888,650 | ||||||
Shares issued to shareholders in reinvestment of dividends and distributions | 4 | 4,031 | ||||||
Shares redeemed | (378,741,376 | ) | (1,188,980,225 | ) | ||||
|
|
|
| |||||
Net decrease | (13,032,163 | ) | (84,087,544 | ) | ||||
|
|
|
| |||||
| Class 4 | ||||||||
Shares sold | 896,516,968 | 1,781,890,756 | ||||||
Shares issued to shareholders in reinvestment of dividends and distributions | 14 | 4,835 | ||||||
Shares redeemed | (859,299,648 | ) | (1,844,944,242 | ) | ||||
|
|
|
| |||||
Net decrease | 37,217,334 | (63,048,651 | ) | |||||
|
|
|
| |||||
Total Net Decrease | 3,718,611 | (169,484,006 | ) | |||||
|
|
|
| |||||
5. Subsequent Events:
Management has evaluated the impact of all subsequent events on the Fund through the date the financial statements were issued and has determined that there were no subsequent events requiring adjustment or additional disclosure in the financial statements.
| BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 | 13 |
Table of Contents
| Master LLC Portfolio Information | Master Tax-Exempt LLC |
| As of September 30, 2013 | ||
| Portfolio Composition | Percent of Net Assets | |||
Variable Rate Demand Notes | 86 | % | ||
Fixed Rate Notes | 11 | |||
Tax-Exempt Commercial Paper | 4 | |||
Liabilities in Excess of Other Assets | (1 | ) | ||
|
| |||
Total | 100 | % | ||
|
| |||
| 14 | BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 |
Table of Contents
Master Tax-Exempt LLC (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
Alabama — 3.6% | ||||||||
Alabama Federal and Highway Finance Authority, RB, VRDN, FLOATS, Series 2W (Barclays Bank PLC SBPA), 0.12%, 10/07/13 (a)(b)(c) | $ | 4,200 | $ | 4,200,000 | ||||
Camden Alabama IDB, RB, Weyerhaeuser Co. Project, Series A, 6.13%, 12/01/13 (d) | 200 | 201,931 | ||||||
Columbia IDB, Refunding RB, VRDN, Alabama Power Co. Project, 0.03%, 10/01/13 (b) | 45,000 | 45,000,000 | ||||||
Huntsville IDB, Refunding RB, VRDN, AMT (Federal Home Loan Bank of Atlanta LOC), | 1,915 | 1,915,000 | ||||||
Mobile Downtown Redevelopment Authority, RB, VRDN (b): | ||||||||
Series A (National Australia Bank Ltd. LOC), | 3,240 | 3,240,000 | ||||||
Series B (Australia and New Zealand Banking Group Ltd. LOC), 0.08%, 10/07/13 | 3,175 | 3,175,000 | ||||||
Mobile IDB, Refunding RB, VRDN, Alabama Power Co. Project (Bank of New York Mellon LOC), 0.07%, 10/01/13 (b) | 18,200 | 18,200,000 | ||||||
Parrish IDB, Refunding RB, VRDN, Alabama Power Co. Project, 0.07%, 10/01/13 (b) | 28,850 | 28,850,000 | ||||||
|
| |||||||
| 104,781,931 | ||||||||
Alaska — 0.8% | ||||||||
City of Valdez Alaska, Refunding RB, VRDN, Philips Project, Series C, 0.08%, 10/07/13 (b) | 24,400 | 24,400,000 | ||||||
Arizona — 1.5% | ||||||||
Phoenix Arizona IDA, RB, VRDN, Leggett & Platt, Inc., Project, AMT (Wells Fargo Bank NA LOC), 0.27%, 10/07/13 (b) | 4,870 | 4,870,000 | ||||||
Salt River Pima-Maricopa Indian Community, RB, VRDN (Bank of America NA LOC), | 38,500 | 38,500,000 | ||||||
|
| |||||||
| 43,370,000 | ||||||||
| Municipal Bonds | Par (000) | Value | ||||||
Arkansas — 0.2% | ||||||||
Arkansas Development Finance Authority, RB, VRDN, Mortgage-Backed Securities Program, Series E, AMT (Ginnie Mae & Fannie Mae Guarantors) (State Street Bank & Trust Co. SBPA), 0.15%, 10/07/13 (b) | $ | 3,200 | $ | 3,200,000 | ||||
City of Springdale Arkansas Sales & Use Tax Revenue, Refunding RB, 2.00%, 7/01/14 (e) | 1,800 | 1,823,346 | ||||||
|
| |||||||
| 5,023,346 | ||||||||
California — 6.5% | ||||||||
ABAG Finance Authority for Nonprofit Corps., RB, VRDN, Acadia Creek at Union Project, Series A (Bank Of America NA SBPA), | 12,000 | 12,000,000 | ||||||
Bay Area Toll Authority, P-FLOATS, RB, VRDN, Series C1 (Bank of America NA Liquidity Agreement), 0.08%, 10/07/13 (a)(b)(c) | 4,910 | 4,910,000 | ||||||
California Municipal Finance Authority, RB, VRDN, Westmont College, Series A (Comerica Bank LOC), 0.10%, 10/07/13 (b) | 7,900 | 7,900,000 | ||||||
California School Cash Reserve Program | ||||||||
Series AA, 2.00%, 10/01/13 | 23,400 | 23,401,125 | ||||||
Subordinate, Series X, 2.00%, 10/01/13 | 1,900 | 1,900,086 | ||||||
City of Anaheim California, Deutsche Bank SPEARS/LIFERS Trust, Refunding RB, VRDN, Series A (Deutsche Bank Guarantor, Deutsche Bank AG SBPA), 0.08%, 10/07/13 (b)(c) | 4,000 | 4,000,000 | ||||||
City of Los Angeles California Wastewater System, RB, VRDN, Eagle Tax-Exempt Trust, Class A (Citibank NA SBPA), 0.08%, 10/07/13 (a)(b)(c) | 4,500 | 4,500,000 | ||||||
County of Los Angeles California Schools, RB, Pooled Financing Program, Series C-6, | 2,800 | 2,812,299 | ||||||
| Portfolio Abbreviations |
| To simplify the listings of portfolio holdings in the Schedule of Investments, the names and descriptions of many of the securities have been abbreviated according to the following list: | AGC | Assured Guarantee Corp. | IDB | Industrial Development Board | ||||
| AGM | Assured Guaranty Municipal Corp. | IDRB | Industrial Development Revenue Bonds | |||||
| AMT | Alternative Minimum Tax (subject to) | ISD | Independent School District | |||||
| ARB | Airport Revenue Bonds | LIFERS | Long Inverse Floating Exempt Receipts | |||||
| BAN | Bond Anticipation Notes | LOC | Letter of Credit | |||||
| BHAC | Berkshire Hathaway Assurance Corp. | MERLOTS | Municipal Exempt Receipts Liquidity Optional Tenders | |||||
| COP | Certificates of Participation | M/F | Multi-Family | |||||
| DRIVERS | Derivative Inverse Tax-Exempt Receipts | NPFGC | National Public Finance Guarantee Corp. | |||||
| ECN | Extendible Commercial Note | P-FLOATS | Puttable Floating Option Tax-Exempt Receipt | |||||
| EDA | Economic Development Authority | PUTTERS | Puttable Tax-Exempt Receipts | |||||
| EDC | Economic Development Corp. | RAN | Revenue Anticipation Notes | |||||
| FGIC | Financial Guaranty Insurance Co. | RB | Revenue Bonds | |||||
| FLOATS | Floating Rate Securities | ROCS | Reset Option Certificates | |||||
| GO | General Obligation Bonds | SBPA | Stand-by Bond Purchase Agreements | |||||
| HDA | Housing Development Authority | SPEARS | Short Puttable Exempt Adjustable Receipts | |||||
| HFA | Housing Finance Agency | TAN | Tax Anticipation Notes | |||||
| HRB | Housing Revenue Bonds | TECP | Tax-Exempt Commercial Paper | |||||
| IDA | Industrial Development Authority | VRDN | Variable Rate Demand Notes |
See Notes to Financial Statements.
| BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 | 15 |
Table of Contents
Schedule of Investments (continued) | Master Tax-Exempt LLC (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
California (concluded) | ||||||||
County of Sacramento California, Deutsche Bank SPEARS/LIFERS Trust, RB, VRDN, Series E, AMT (Deutsche Bank AG SBPA, Deutsche Bank AG Guarantor), 0.12%, 10/07/13 (a)(b)(c) | $ | 4,000 | $ | 4,000,000 | ||||
Los Angeles Community College District, GO, VRDN, FLOATS, Series 2984 (Morgan Stanley Bank Liquidity Agreement), | 7,500 | 7,500,000 | ||||||
Palos Verdes Peninsula Unified School District, Deutsche Bank SPEARS/LIFERS Trust, GO, VRDN, Series R (Deutsche Bank AG Guarantor, Deutsche Bank AG SBPA), | 12,715 | 12,715,000 | ||||||
San Mateo Union High School District California, GO, ROCS, VRDN, Series II-R-11578PB (AGC), (PB Capital Corp. Liquidity Agreement), | 13,555 | 13,555,000 | ||||||
State of California, RAN, Series A-2, | 60,000 | 60,772,359 | ||||||
Upland California Unified School District, Deutsche Bank SPEARS/LIFERS Trust, GO, SPEARS, VRDN, Series A (Deutsche Bank AG Guarantor, Deutsche Bank AG SBPA), | 10,804 | 10,804,000 | ||||||
West Contra Costa California Unified School District, Deutsche Bank SPEARS/LIFERS Trust, GO, SPEARS, VRDN, Series D, (Deutsche Bank AG Guarantor, Deutsche Bank AG SBPA), | 17,090 | 17,090,000 | ||||||
|
| |||||||
| 187,859,869 | ||||||||
Colorado — 1.1% | ||||||||
City of Denver Colorado County & City School District, JPMorgan Chase PUTTERS/DRIVERS Trust, GO, VRDN, School District No. 1, Series B (JP Morgan Chase Bank NA LOC), | 7,190 | 7,190,000 | ||||||
Colorado Housing & Finance Authority, RB, VRDN, Class I, M/F Housing Mortgage, Series C-4 (Federal Home Loan Bank SBPA), | 3,860 | 3,860,000 | ||||||
Colorado State Health Facilities Authority, Deutsche Bank SPEARS/LIFERS Trust, Refunding RB, VRDN, Series 1131 (Deutsche Bank AG Guarantor, Deutsche Bank AG SBPA), | 10,225 | 10,225,000 | ||||||
Sheridan Redevelopment Agency, Refunding, Tax Allocation Bonds, VRDN (JPMorgan Chase Bank LOC), 0.12%, 10/07/13 (b) | 3,400 | 3,400,000 | ||||||
University of Colorado, RB, ROCS, VRDN, | 5,870 | 5,870,000 | ||||||
|
| |||||||
| 30,545,000 | ||||||||
Connecticut — 0.2% | ||||||||
State of Connecticut, P-FLOATS, GO, VRDN, Series A (Bank of America NA Liquidity Agreement), 0.08%, 10/07/13 (a)(b)(c) | 3,305 | 3,305,000 | ||||||
| Municipal Bonds | Par (000) | Value | ||||||
Connecticut (concluded) | ||||||||
Town of Stafford Connecticut, GO, BAN, Refunding, 1.00%, 8/05/14 | $ | 3,955 | $ | 3,978,670 | ||||
|
| |||||||
| 7,283,670 | ||||||||
District of Columbia — 0.1% | ||||||||
District of Columbia, RB, VRDN, Community Connections Real Estate, Series A (Manufacturers & Traders Trust Co. LOC), | 3,500 | 3,500,000 | ||||||
Florida — 6.2% | ||||||||
County of Brevard Florida Housing Finance Authority, RB, VRDN, Timber Trace Apartments Project, AMT (Citibank NA LOC), | 10,035 | 10,035,000 | ||||||
County of Collier Florida IDA, RB, VRDN, March Project, AMT (Wells Fargo Bank NA LOC), | 1,550 | 1,550,000 | ||||||
County of Hillsborough Florida Housing Finance Authority, HRB VRDN, AMT (b): | ||||||||
Brandon, Series A (Fannie Mae Guarantor, Fannie Mae Liquidity Agreement), | 5,180 | 5,180,000 | ||||||
Claymore Crossings Apartments (Citibank NA LOC), 0.12%, 10/07/13 | 1,900 | 1,900,000 | ||||||
County of Manatee Florida Housing Finance Authority, HRB, VRDN, Village at Cortez Apartments, Series A, AMT (Fannie Mae Guarantor, Fannie Mae Liquidity Agreement), 0.10%, 10/07/13 (b) | 10,900 | 10,900,000 | ||||||
County of Miami-Dade Florida School Board, Deutsche Bank SPEARS/LIFERS Trust, COP, VRDN, SPEARS, Series A (Deutsche Bank AG Guarantor, Deutsche Bank AG SBPA), | 15,980 | 15,980,000 | ||||||
County of Miami-Dade Florida Transit System Sales Surtax Revenue, RB, VRDN, Eagle Tax-Exempt Trust, Class A (AGM), (Citibank NA Liquidity Agreement), 0.09%, 10/07/13 (a)(b)(c) | 7,450 | 7,450,000 | ||||||
County of Miami-Dade Florida Water & Sewer System Revenue, RB, VRDN, ROCS (AGM), (Citibank NA Liquidity Agreement), | 21,185 | 21,185,000 | ||||||
County of Orange Florida School Board, Deutsche Bank SPEARS/LIFERS Trust, COP, VRDN, SPEARS, Series A (Deutsche Bank AG Guarantor, Deutsche Bank AG SBPA), | 5,615 | 5,615,000 | ||||||
County of Orange Florida, RBC Muni Products, Inc. Trust, Refunding RB, FLOATS, VRDN, Series 0-43 (Royal Bank of Canada SBPA), | 5,115 | 5,115,000 | ||||||
County of Palm Beach Florida, RB, VRDN, Flight Safety Program, AMT, 0.07%, 10/07/13 (b) | 4,000 | 4,000,000 | ||||||
County of Sarasota Florida Public Hospital District, Refunding RB, VRDN, Sarasota Memorial Hospital Project, Series A (Northern Trust Co. LOC), 0.03%, 10/01/13 (b) | 7,780 | 7,780,000 | ||||||
See Notes to Financial Statements.
| 16 | BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 |
Table of Contents
Schedule of Investments (continued) | Master Tax-Exempt LLC (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
Florida (concluded) | ||||||||
County of St. John’s Florida, Deutsche Bank SPEARS/LIFERS Trust, RB, VRDN, SPEARS (Deutsche Bank AG SBPA, Deutsche Bank AG Guaranteed), 0.12%, 10/07/13 (a)(b)(c) | $ | 9,798 | $ | 9,798,000 | ||||
County of Tampa-Hillsborough Florida SPEARS/LIFERS Trust, Refunding RB, VRDN, SPEARS, Series A (Deutsche Bank AG Guarantor, Deutsche Bank AG SBPA), | 14,760 | 14,760,000 | ||||||
Florida Housing Finance Corp., RB, VRDN, Savannah Springs Apartments, Series N, AMT (Citibank NA LOC), 0.13%, 10/07/13 (b) | 6,600 | 6,600,000 | ||||||
Florida State Board of Governors, Refunding RB, Series A, 5.00%, 7/01/14 | 1,950 | 2,015,827 | ||||||
Florida State, Wells Fargo Stage Trust, GO, Refunding, FLOATS, VRDN (Wells Fargo Bank NA Liquidity Agreement), | 7,200 | 7,200,000 | ||||||
Orlando & Orange County Florida Expressway Authority, RB, VRDN, Eagle Tax-Exempt Trust, Class A (BHAC) (Citibank NA Liquidity Agreement) (b)(c): | ||||||||
Series 0107, 0.08%, 10/07/13 (a) | 10,290 | 10,290,000 | ||||||
Series 0145, 0.08%, 10/07/13 | 11,300 | 11,300,000 | ||||||
Orlando Utilities Commission, Refunding RB, VRDN, 0.18%, 4/28/14 (b) | 7,600 | 7,600,000 | ||||||
State of Florida Lottery Revenue, Refunding RB, Series E, 4.00%, 7/01/14 | 5,580 | 5,734,632 | ||||||
West Palm Beach Special Obligations, Deutsche Bank SPEARS/LIFERS Trust, RB, VRDN, SPEARS, (Deutsche Bank AG Guarantor, | 6,190 | 6,190,000 | ||||||
|
| |||||||
| 178,178,459 | ||||||||
Georgia — 1.8% | ||||||||
County of Whitfield Georgia Development Authority, RB, VRDN, Aladdin Manufacturing Corp. Project (Wells Fargo Bank NA LOC), | 3,100 | 3,100,000 | ||||||
Main Street Natural Gas, Inc., RB, VRDN, Series A (Royal Bank of Canada Guarantor, Royal Bank of Canada SBPA), 0.07%, 10/07/13 (b) | 21,495 | 21,495,000 | ||||||
Municipal Electric Authority of Georgia, RB, VRDN, Project 1 Subordinated Bonds, Series B (Bank of Tokyo-Mitsubishi UFJ LOC), | 2,000 | 2,000,000 | ||||||
State of Georgia, GO, ROCS, VRDN, | 25,705 | 25,705,000 | ||||||
|
| |||||||
| 52,300,000 | ||||||||
Illinois — 8.2% | ||||||||
BB&T Municipal Trust, RB, FLOATS, VRDN, Series 5001 (Rabobank Nederland Liquidity Agreement, Rabobank Nederland LOC), | 9,965 | 9,965,000 | ||||||
| Municipal Bonds | Par (000) | Value | ||||||
Illinois (concluded) | ||||||||
Chicago Illinois Board of Education, GO, Refunding, ROCS, VRDN, Series RR-II-R011879 (AGM), (Citibank NA Liquidity Agreement), | $ | 16,480 | $ | 16,480,000 | ||||
City of Chicago Illinois, ARB, O’Hare International Airport, Third Lien, VRDN, Series D (Barclays Bank LOC), 0.08%, 10/07/13 (b) | 7,000 | 7,000,000 | ||||||
City of Chicago Illinois Deutsche Bank SPEARS/LIFERS Trust, GO, VRDN, (Deutsche Bank AG SBPA, Deutsche Bank AG Guarantor), | 20,325 | 20,325,000 | ||||||
City of Chicago Illinois Waterworks Revenue, RB, VRDN, 0.27%, 10/01/13 (b) | 4,100 | 4,100,000 | ||||||
City of Chicago Illinois, Deutsche Bank SPEARS/LIFERS Trust, RB, VRDN, Series A (Deutsche Bank AG Guarantor Deutsche Bank AG SBPA) (b)(c): | ||||||||
0.08%, 10/07/13 | 40,500 | 40,500,000 | ||||||
0.08%, 10/07/13 | 4,445 | 4,445,000 | ||||||
Counties of DeKalb & Kane Illinois Unified School District No. 427, SPEARS/LIFERS Trust, GO, SPEARS, VRDN, Series B (Deutsche Bank AG SBPA, Deutsche Bank AG Guaranty), | 13,070 | 13,070,000 | ||||||
Illinois Finance Authority, RB, VRDN (b): | ||||||||
ROCS, Series RR-11624 (AGC), (Citibank NA SBPA), 0.27%, 10/07/13 (a)(b)(c) | 16,100 | 16,100,000 | ||||||
University of Chicago Medical Center, Series E-1 (JPMorgan Chase Bank NA LOC), 0.07%, 10/01/13 | 11,400 | 11,400,000 | ||||||
Illinois Finance Authority, Refunding RB, VRDN (b): | ||||||||
Advocate Health Care Network, Sub-Series C-1 (JPMorgan Chase Bank NA SBPA), 0.10%, 10/07/13 | 35,000 | 35,000,000 | ||||||
Eagle Tax-Exempt Trust, Series 2006-0118, Class A (Citibank NA SBPA), | 3,150 | 3,150,000 | ||||||
St. Xavier University Project, Series A (Bank of America NA LOC), 0.09%, 10/07/13 | 5,285 | 5,285,000 | ||||||
Illinois State Finance Authority, OSF Healthcare System, Deutsche Bank SPEARS/LIFERS Trust, RB, VRDN, Series A (Deutsche Bank AG Guarantor, Deutsche Bank AG SBPA), | 9,735 | 9,735,000 | ||||||
University of Illinois, Refunding RB, VRDN (b): | ||||||||
Eagle Tax-Exempt Trust, Series 2006-0124, Class A (NPFGC), (Citibank NA Liquidity Agreement), 0.11%, 10/07/13 (a)(c) | 10,000 | 10,000,000 | ||||||
UIC South Campus Development (JPMorgan Chase Bank LOC), 0.07%, 10/07/13 | 24,235 | 24,235,000 | ||||||
Village of Schaumburg Illinois, JPMorgan Chase PUTTERS/DRIVERS Trust, GO, Refunding, VRDN, Series A (JPMorgan Chase Bank Liquidity Agreement), 0.08%, 10/07/13 (a)(b)(c) | 7,275 | 7,275,000 | ||||||
|
| |||||||
| 238,065,000 | ||||||||
See Notes to Financial Statements.
| BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 | 17 |
Table of Contents
Schedule of Investments (continued) | Master Tax-Exempt LLC (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
Indiana — 1.8% | ||||||||
City of Hartford Indiana, RB, VRDN, Petoskey Plastics, Inc., AMT (Comerica Bank LOC), | $ | 2,725 | $ | 2,725,000 | ||||
City of Michigan Indiana, RB, VRDN, Palatek Project, AMT (Comerica Bank LOC), | 3,800 | 3,800,000 | ||||||
Indiana State Finance Authority, JPMorgan Chase PUTTERS/DRIVERS Trust, RB, VRDN, Series C (JPMorgan Chase Bank Liquidity Agreement), 0.08%, 10/07/13 (a)(b)(c) | 16,295 | 16,295,000 | ||||||
Indianapolis Local Public Improvement Bond Bank, Refunding RB, ROCS, VRDN, Series II-R-11779 (AGC), (Citibank NA SBPA), | 28,575 | 28,575,000 | ||||||
|
| |||||||
| 51,395,000 | ||||||||
Iowa — 3.6% | ||||||||
City of Clear Lake Iowa, RB, VRDN, Joe Corbi’s Pizza Project, AMT (Manufacturers & Traders LOC), 0.22%, 10/07/13 (b) | 3,010 | 3,010,000 | ||||||
Iowa Finance Authority, RB, VRDN, CJ BIO America, Inc. Project (Korea Development Bank LOC), | 94,000 | 94,000,000 | ||||||
Iowa State Special Obligations, RB, Barclays Capital Municipal Trust Receipts, VRDN, FLOATS, Series 13B-C-D (Barclays Bank PLC Liquidity Agreement), 0.09%, 10/07/13 (a)(b)(c) | 6,200 | 6,200,000 | ||||||
|
| |||||||
| 103,210,000 | ||||||||
Kansas — 0.1% | ||||||||
Counties of Sedgwick & Shawnee Kansas, JPMorgan Chase PUTTERS/DRIVERS Trust, Refunding RB, VRDN, Series A-3, AMT | 2,135 | 2,135,000 | ||||||
Louisiana — 1.6% | ||||||||
East Baton Rouge Sewerage Commission, RB, | 400 | 406,311 | ||||||
Louisiana Local Government Environmental Facilities & Community Development Authority, RB, VRDN (b): | ||||||||
BASF Corp. Project, AMT, 0.23%, 10/07/13 | 4,000 | 4,000,000 | ||||||
Honeywell International, Inc. Project, | 6,000 | 6,000,000 | ||||||
Louisiana Local Government Environmental Facilities & Community Development Authority, Refunding RB, VRDN, BASF Corp. | 7,500 | 7,500,000 | ||||||
Louisiana Offshore Terminal Authority, Refunding RB, VRDN, Loop LLC Project, Series B (JPMorgan Chase Bank NA LOC), 0.07%, 10/07/13 (b) | 15,050 | 15,050,000 | ||||||
Parish of Ascension Louisiana, RB, VRDN, BASF Corp. Project, 0.23%, 10/07/13 (b) | 10,100 | 10,100,000 | ||||||
St. John the Baptist Parish Louisiana, JPMorgan Chase PUTTERS/DRIVERS Trust, RB, VRDN, Series A (JPMorgan Chase Bank Liquidity Agreement), 0.12%, 10/01/13 (a)(b)(c) | 3,500 | 3,500,000 | ||||||
|
| |||||||
| 46,556,311 | ||||||||
| Municipal Bonds | Par (000) | Value | ||||||
Maryland — 1.6% | ||||||||
County of Baltimore Maryland, RB, VRDN, Paths at Loveton (Manufacturers & Traders Trust Co. LOC), 0.12%, 10/07/13 (b) | $ | 3,610 | $ | 3,610,000 | ||||
Maryland Community Development Administration, RB, Clipper Tax-Exempt Certificate Trust, VRDN, Series 47, AMT (State Street Bank & Trust Co. Liquidity Agreement), 0.22%, 10/07/13 (b)(c) | 1,108 | 1,108,000 | ||||||
Maryland EDC, RB, VRDN AMT (Manufacturers & Traders Trust Co. LOC) (b): | ||||||||
Bakery de France Facility, 0.37%, 10/07/13 | 8,995 | 8,995,000 | ||||||
Linemark Printing Project, 0.27%, 10/07/13 | 3,290 | 3,290,000 | ||||||
Pharmaceutics International, Inc., Series A, 0.22%, 10/07/13 | 3,265 | 3,265,000 | ||||||
Maryland Health & Higher Educational Facilities Authority, Refunding RB, VRDN, ROCS, Series 11594 (AGC), (Citibank NA Liquidity Agreement), 0.32%, 10/07/13 (a)(b)(c) | 19,285 | 19,285,000 | ||||||
Washington Suburban Sanitary Commission, GO, Series A, VRDN, 0.07%, 10/07/13 (b) | 7,000 | 7,000,000 | ||||||
|
| |||||||
| 46,553,000 | ||||||||
Massachusetts — 4.7% | ||||||||
City of Haverhill Massachusetts, GO, BAN: | ||||||||
1.25%, 12/13/13 | 3,000 | 3,005,562 | ||||||
0.75%, 9/01/14 | 6,000 | 6,023,659 | ||||||
Refunding, 1.00%, 12/13/13 | 2,538 | 2,540,663 | ||||||
City of New Bedford Massachusetts, GO, BAN, Refunding, 1.00%, 2/07/14 | 22,000 | 22,048,321 | ||||||
City of Pittsfield Massachusetts, GO, BAN, Refunding: | ||||||||
Series A, 1.00%, 1/24/14 | 6,694 | 6,707,219 | ||||||
Series B, 1.00%, 1/24/14 | 1,600 | 1,602,983 | ||||||
Commonwealth of Massachusetts, GO, VRDN, Central Artery/Ted Williams Tunnel Infrastructure Loan Act of 2000 (b): | ||||||||
Series A (Bank of America NA SBPA), | 18,955 | 18,955,000 | ||||||
Series B (US Bank NA SBPA), | 4,700 | 4,700,000 | ||||||
Massachusetts Bay Transportation Authority, Refunding RB, VRDN, 7-Month Window, Senior Series A, 0.16%, 4/28/14 (b) | 3,500 | 3,500,000 | ||||||
Massachusetts Development Finance Agency, Refunding RB, VRDN, Series U-6C (TD Bank NA LOC), 0.05%, 10/01/13 (b) | 10,300 | 10,300,000 | ||||||
Massachusetts Development Finance Agency, Deutsche Bank SPEARS/LIFERS Trust, RB, VRDN, Series X (Deutsche Bank AG SBPA, Deutsche Bank AG Guarantor), | 9,630 | 9,630,000 | ||||||
Massachusetts Development Finance Agency, RBC Municipal Product, Inc. Trust, RB, VRDN, FLOATS, Series E-38 (Royal Bank of Canada LOC, Royal Bank of Canada SBPA), | 9,695 | 9,695,000 | ||||||
Massachusetts Health & Educational Facilities Authority, Refunding RB, VRDN, Great Brook Valley Health Center, Series A (TD Bank NA LOC), 0.07%, 10/07/13 (b) | 1,215 | 1,215,000 | ||||||
See Notes to Financial Statements.
| 18 | BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 |
Table of Contents
Schedule of Investments (continued) | Master Tax-Exempt LLC (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
Massachusetts (concluded) | ||||||||
Massachusetts School Building Authority, JPMorgan Chase PUTTERS/DRIVERS Trust, Refunding RB, VRDN, Series A (JPMorgan Chase Bank Liquidity Agreement), | $ | 7,515 | $ | 7,515,000 | ||||
Massachusetts State College Building Authority, Deutsche Bank SPEARS/LIFERS Trust, RB, VRDN, Series B (Deutsche Bank AG SBPA, Deutsche Bank AG Guarantor), | 7,970 | 7,970,000 | ||||||
Massachusetts State Department of Transportation, Refunding RB, VRDN, Series A2 (Bank of Tokyo-Mitsubishi UFJ SBPA), 0.05%, 10/07/13 (b) | 3,700 | 3,700,000 | ||||||
Massachusetts Water Resources Authority, RBC Municipal Product Inc. Trust, Refunding RB, VRDN, FLOATS, Series F (Royal Bank of Canada LOC, Royal Bank of Canada SBPA), | 10,000 | 10,000,000 | ||||||
Town of Amesbury Massachusetts, GO, Refunding, BAN, 1.00%, 12/13/13 | 4,118 | 4,122,320 | ||||||
University of Massachusetts Building Authority, Refunding RB, VRDN, 7-Month Window, Senior Series 2, 0.16%, 4/28/14 (b) | 3,240 | 3,240,000 | ||||||
|
| |||||||
| 136,470,727 | ||||||||
Michigan — 4.1% | ||||||||
Huron Valley School District Michigan, GO, Refunding, 5.00%, 5/01/14 | 535 | 549,628 | ||||||
Lansing Michigan Board of Water & Light, RB, | 2,985 | 2,985,000 | ||||||
Michigan Finance Authority, RB, VRDN (b): | ||||||||
Adrian College (Comerica Bank LOC), | 1,970 | 1,970,000 | ||||||
Higher Education Facilities (JPMorgan Chase Bank NA LOC), 0.08%, 10/07/13 | 2,800 | 2,800,000 | ||||||
Michigan Higher Education Facilities Authority, Refunding RB, VRDN, Limited Obligation, Law School Project, Series A (Wells Fargo Bank NA LOC), 0.06%, 10/07/13 (b) | 4,485 | 4,485,000 | ||||||
Michigan Higher Education Student Loan Authority, RBC Municipal Products, Inc. Trust, Refunding RB, FLOATS, VRDN, Series XII-Z3, AMT (Royal Bank of Canada LOC, Royal Bank of Canada SBPA), 0.13%, 10/07/13 (b)(c) | 43,545 | 43,545,000 | ||||||
Michigan State HDA, HRB, VRDN, Series A (b): | ||||||||
Berrien Woods III, AMT (Citibank NA LOC), 0.11%, 10/07/13 | 4,465 | 4,465,000 | ||||||
M/F Housing, Series C, AMT (JPMorgan Chase Bank NA SBPA), 0.12%, 10/07/13 | 32,640 | 32,640,000 | ||||||
Michigan State HDA, Refunding RB, VRDN, AMT (Barclays Bank PLC SBPA), | 2,975 | 2,975,000 | ||||||
| Municipal Bonds | Par (000) | Value | ||||||
Michigan (concluded) | ||||||||
Michigan State Hospital Finance Authority, Refunding RB, VRDN (b): | ||||||||
0.13%, 4/28/14 | $ | 3,000 | $ | 3,000,000 | ||||
7-Month Window, Ascension Health Senior Credit, 0.13%, 4/28/14 | 3,450 | 3,450,000 | ||||||
Window, Ascension Health Senior Credit, 0.13%, 4/28/14 | 3,430 | 3,430,000 | ||||||
Michigan Strategic Fund, RB, VRDN, MANS LLC Project, AMT (Comerica Bank LOC), | 4,600 | 4,600,000 | ||||||
Michigan Strategic Fund, P-FLOATS, RB, VRDN, Series 840, AMT (Bank of America NA Guarantor, Bank of America NA Liquidity Agreement), | 6,750 | 6,750,000 | ||||||
|
| |||||||
| 117,644,628 | ||||||||
Minnesota — 0.1% | ||||||||
Minneapolis Minnesota, Health Care System, RB, FLOATS, VRDN, Series E-19, Mandatory Put Bonds (Royal Bank of Canada LOC, Royal Bank of Canada SBPA), 0.07%, 10/07/13 (a)(b)(c) | 4,200 | 4,200,000 | ||||||
Mississippi — 1.1% | ||||||||
De Soto County School District, GO, Refunding, | 1,800 | 1,828,962 | ||||||
Mississippi Business Finance Corp., RB, VRDN, Chevron USA, Series A, 0.03%, 10/01/13 (b) | 5,000 | 5,000,000 | ||||||
State of Mississippi, Clipper Tax-Exempt Certificate Trust, RB, VRDN, Series 84 (State Street Bank & Trust Co. SBPA), 0.07%, 10/07/13 (b)(c) | 11,900 | 11,900,000 | ||||||
University of Southern Mississippi, Refunding RB, VRDN, FLOATS Series 3335 (Credit Suisse Liquidity Agreement), | 13,115 | 13,115,000 | ||||||
|
| |||||||
| 31,843,962 | ||||||||
Missouri — 1.3% | ||||||||
City of Kansas City Missouri, Refunding RB, VRDN, Hospital Roe Bartle, Series E (Sumitomo Mitsui Trust Bank Ltd. LOC), 0.08%, 10/07/13 (b) | 3,300 | 3,300,000 | ||||||
City of North Kansas City Missouri, Refunding RB, VRDN, North Kansas City Hospital (Bank of America NA LOC), 0.10%, 10/01/13 (b) | 14,355 | 14,355,000 | ||||||
Kansas City IDA, Refunding RB, VRDN, Ewing Marion Kaufman Foundation, | 13,000 | 13,000,000 | ||||||
Palmyra IDA, RB, VRDN, BASF Corp. Project, AMT, 0.23%, 10/07/13 (b) | 6,000 | 6,000,000 | ||||||
|
| |||||||
| 36,655,000 | ||||||||
Nebraska — 0.6% | ||||||||
City of Lincoln Nebraska, RB, FLOATS, VRDN, Series 2900 (Credit Suisse Liquidity Agreement), 0.09%, 10/07/13 (b) | 16,000 | 16,000,000 | ||||||
See Notes to Financial Statements.
| BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 | 19 |
Table of Contents
Schedule of Investments (continued) | Master Tax-Exempt LLC (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
Nevada — 1.7% | ||||||||
County of Clark Nevada, Refunding ARB, Airport System Revenue, 2.00%, 7/01/14 | $ | 16,600 | $ | 16,804,990 | ||||
County of Clark Nevada School District, Austin Trust, GO, VRDN, Series C (Bank of America NA Liquidity Agreement), | 32,600 | 32,600,000 | ||||||
|
| |||||||
| 49,404,990 | ||||||||
New Hampshire — 0.3% | ||||||||
New Hampshire Health & Education Facilities Authority, RB, VRDN, Eclipse Funding Trust, Series 2007-0018, Solar Eclipse (US Bank NA LOC, US Bank NA Liquidity Agreement), | 10,200 | 10,200,000 | ||||||
New Jersey — 2.6% | ||||||||
Borough of Rumson New Jersey, GO, BAN, | 2,550 | 2,552,708 | ||||||
City of Cape May New Jersey, GO, | 11,040 | 11,090,786 | ||||||
County of Cape May New Jersey, GO, BAN, | 4,700 | 4,728,172 | ||||||
State of New Jersey, RB, P-FLOATS, VRDN, Series MT-837 (Bank of America NA Guarantor, Bank of America NA Liquidity Agreement), | 3,950 | 3,950,000 | ||||||
State of New Jersey P-FLOATS, VRDN, Series B (Bank of America NA LOC, Bank of America NA Liquidity Agreement), | 16,500 | 16,500,000 | ||||||
Township of East Hanover New Jersey, GO, BAN, Series A, 1.00%, 8/21/14 | 4,293 | 4,310,899 | ||||||
Township of Marlboro New Jersey, GO, BAN, | 7,750 | 7,778,961 | ||||||
Township of Mendham New Jersey, GO, BAN, 1.00%, 5/22/14 | 3,617 | 3,629,916 | ||||||
Township of Old Bridge New Jersey, GO, BAN, 1.00%, 10/15/13 | 6,668 | 6,669,527 | ||||||
Township of Sparta New Jersey, GO, Refunding, BAN, 1.00%, 11/01/13 | 5,897 | 5,900,759 | ||||||
Township of West Orange New Jersey, GO, BAN, 1.00%, 5/20/14 | 6,911 | 6,937,668 | ||||||
|
| |||||||
| 74,049,396 | ||||||||
New Mexico — 1.3% | ||||||||
City of Rio Rancho New Mexico, RB, Eclipse Funding Trust, VRDN, Series 2007-0019, Solar Eclipse (US Bank NA LOC, US Bank NA Liquidity Agreement), 0.07%, 10/07/13 (b)(c) | 5,000 | 5,000,000 | ||||||
University of New Mexico, Refunding RB, VRDN (JPMorgan Chase Bank SBPA), | 33,490 | 33,490,000 | ||||||
|
| |||||||
| 38,490,000 | ||||||||
New York — 7.5% | ||||||||
Arlington Central School District, GO, Refunding, Go, Refunding, BAN, 1.00%, 11/15/13 | 3,300 | 3,302,481 | ||||||
Babylon Union Free School District, GO, TAN, 0.75%, 6/27/14 (e) | 7,000 | 7,022,400 | ||||||
| Municipal Bonds | Par (000) | Value | ||||||
New York (continued) | ||||||||
City of New York New York, GO, Refunding, VRDN, ROCS, Series RR II-R-14045 (Citibank NA Liquidity Agreement), | $ | 6,100 | $ | 6,100,000 | ||||
City of New York New York, GO, VRDN (b): | ||||||||
Series F-4 (Landesbank Hessen-Thüringen LOC), 0.09%, 10/07/13 | 9,700 | 9,700,000 | ||||||
Sub-Series H-4 (Bank of New York LOC), 0.05%, 10/01/13 | 10,700 | 10,700,000 | ||||||
Erie County Fiscal Stability Authority, BAN, Series A, 1.00%, 7/31/14 | 10,000 | 10,062,419 | ||||||
Mattituck-Cutchogue Union Free School District, GO, TAN, 1.00%, 6/27/14 | 8,000 | 8,043,058 | ||||||
New York City Housing Development Corp. New York, RB, VRDN, Series A (Freddie Mac LOC), 0.07%, 10/07/13 (b) | 4,750 | 4,750,000 | ||||||
New York City Housing Development Corp. New York, Refunding RB, VRDN, M/F, The Crest, Series A (Landesbank Hessen-Thüringen LOC), 0.09%, 10/07/13 | 4,000 | 4,000,000 | ||||||
New York City Industrial Development Agency, RB, VRDN Korean Air Lines Co. Ltd. Project, AMT (Kookmin Bank LOC) (b): | ||||||||
Series A, 0.19%, 10/07/13 | 27,200 | 27,200,000 | ||||||
Series C, 0.19%, 10/07/13 | 5,000 | 5,000,000 | ||||||
New York City Metropolitan Transportation Authority, Deutsche Bank SPEARS/LIFERS Trust, RB, VRDN, Series C (Deutsche Bank AG Guarantor, Deutsche Bank AG SBPA), | 10,000 | 10,000,000 | ||||||
New York City Municipal Water & Sewer Finance Authority, Refunding RB, VRDN, Water & Sewer System, 2nd General Resolution, Fiscal 2011, Series DD-1 (TD Bank NA SBPA), | 6,000 | 6,000,000 | ||||||
New York City Municipal Water Finance Authority, RB, VRDN, Eagle Tax-Exempt Trust, Series 2009-0046, Class A (Citibank NA Liquidity Agreement), 0.07%, 10/07/13 (a)(b)(c) | 12,300 | 12,300,000 | ||||||
New York City Municipal Water Finance Authority, Refunding RB, VRDN, Eagle Tax-Exempt Trust, Series 2009-0047, Class A (Citibank NA SBPA), 0.11%, 10/07/13 (a)(b)(c) | 6,900 | 6,900,000 | ||||||
New York State HFA, RB, VRDN (Wells Fargo Bank NA LOC), 0.07%, 10/07/13 (b) | 1,600 | 1,600,000 | ||||||
Patchogue-Medford Union Free School District, GO, TAN (State Aid Withholding), | 18,400 | 18,489,792 | ||||||
Port Authority of New York & New Jersey, JPMorgan Chase PUTTERS/DRIVERS Trust, RB, VRDN, 37th Series, AMT (JPMorgan Chase Bank NA SBPA), 0.12%, 10/07/13 (a)(b)(c) | 25,325 | 25,325,000 | ||||||
Putnam County New York, GO, TAN, | 12,000 | 12,005,583 | ||||||
South Country Central School District at Brookhaven, GO, TAN, 0.75%, 6/26/14 | 12,600 | 12,639,854 | ||||||
Taconic Hills Central School District at Craryville, GO, Refunding, BAN, 1.00%, 7/03/14 | 7,348 | 7,382,256 | ||||||
See Notes to Financial Statements.
| 20 | BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 |
Table of Contents
Schedule of Investments (continued) | Master Tax-Exempt LLC (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
New York (concluded) | ||||||||
Town of Grand Island New York, GO, Refunding, BAN, 0.75%, 10/16/13 | $ | 7,556 | $ | 7,557,251 | ||||
|
| |||||||
| 216,080,094 | ||||||||
North Carolina — 1.9% | ||||||||
Charlotte Housing Authority North Carolina, RB, VRDN (Wells Fargo Bank NA LOC) (b): | ||||||||
Oak Park Project 0.08%, 10/07/13 | 5,000 | 5,000,000 | ||||||
Stonehaven East Project 0.08%, 10/07/13 | 9,050 | 9,050,000 | ||||||
City of Raleigh North Carolina, Refunding RB, VRDN, 7-Month Windows, 0.17%, 4/28/14 (b) | 2,790 | 2,790,000 | ||||||
County of Alamance North Carolina Industrial Facilities & Pollution Control Financing Authority North Carolina, IDRB, VRDN, Millender Project, AMT (Wells Fargo Bank NA LOC), 0.22%, 10/07/13 (b) | 800 | 800,000 | ||||||
County of Gaston North Carolina Industrial Facilities & Pollution Control Financing Authority North Carolina, IDRB, VRDN, Marlatex Corp. Project, AMT (Wells Fargo Bank NA LOC), 0.27%, 10/07/13 (b) | 595 | 595,000 | ||||||
County of Lee North Carolina Industrial Facilities & Pollution Control Financing Authority North Carolina, RB, VRDN, Ardeen Corp. Project, AMT (Comerica Bank LOC), 0.17%, 10/07/13 (b) | 2,550 | 2,550,000 | ||||||
County of Mecklenburg North Carolina, GO, Refunding, VRDN, 7-Month Windows, Series D, 0.17%, 4/28/14 (b) | 5,595 | 5,595,000 | ||||||
County of Yancey North Carolina Industrial Facilities & Pollution Control Financing Authority, RB, VRDN, AMT (Branch Banking & Trust LOC), 0.15%, 10/07/13 (b) | 3,500 | 3,500,000 | ||||||
North Carolina Agricultural Finance Authority, RB, VRDN, Albemarle Cotton Growers, AMT (Wells Fargo Bank NA LOC), 0.22%, 10/03/13 (b) | 400 | 400,000 | ||||||
North Carolina Agricultural Finance Authority, Refunding RB, VRDN, Harvey Fertilizer & Gas Project, AMT (Wells Fargo Bank NA LOC), 0.27%, 10/07/13 (b) | 710 | 710,000 | ||||||
North Carolina Capital Facilities Finance Agency, RB, VRDN, Aquarium Society Project (Bank of America NA LOC), 0.12%, 10/07/13 (b) | 16,935 | 16,935,000 | ||||||
North Carolina Capital Facilities Finance Agency, Refunding RB, VRDN, High Point University Project (Branch Banking & Trust LOC), | 925 | 925,000 | ||||||
North Carolina HFA, RB, VRDN, MERLOTS, Series B12, AMT (Wells Fargo Bank NA SBPA), 0.24%, 10/07/13 (a)(b)(c) | 5,425 | 5,425,000 | ||||||
|
| |||||||
| 54,275,000 | ||||||||
Ohio — 1.7% | ||||||||
County of Cleveland-Cuyahoga Ohio Port Authority, Refunding RB, VRDN, Carnegie/89th Garage and Service Center LLC Project (JPMorgan Chase Bank LOC), 0.07%, 10/07/13 (b) | 17,130 | 17,130,000 | ||||||
Ohio Housing Finance Agency, RB, VRDN, AMT (Wells Fargo Bank NA SBPA), | 1,000 | 1,000,000 | ||||||
| Municipal Bonds | Par (000) | Value | ||||||
Ohio (concluded) | ||||||||
State of Ohio, Wells Fargo Stage Trust, | $ | 26,355 | $ | 26,355,000 | ||||
Village of New Albany Ohio, GO, BAN, | 3,300 | 3,319,485 | ||||||
|
| |||||||
| 47,804,485 | ||||||||
Oregon — 0.2% | ||||||||
Port of Portland, Refunding RB, VRDN, Portland International Airport, Series 18-A, AMT (US Bank NA LOC), 0.09%, 10/07/13 (b) | 6,870 | 6,870,000 | ||||||
Pennsylvania — 2.8% | ||||||||
Central Bradford Progress Authority, RBC Municipal Products, Inc. Trust, RB, VRDN, FLOATS, (Royal Bank of Canada LOC SBPA) Bank of Canada SBPA), 0.07%, 10/07/13 (a)(b)(c) | 3,970 | 3,970,000 | ||||||
Commonwealth of Pennsylvania, Clipper Caravel Tax-Exempt Certificate Trust, RB, VRDN, FLOATS, Series 58 (State Street Bank & Trust Co. SBPA), 0.07%, 10/07/13 (a)(b)(c) | 17,500 | 17,500,000 | ||||||
County of Allegheny Pennsylvania Hospital Development Authority, RBC Municipal Products, Inc. Trust, RB, FLOATS, VRDN (Royal Bank of Canada LOC SBPA), 0.07%, 10/07/13 (a)(b)(c) | 12,190 | 12,190,000 | ||||||
County of Blair Pennsylvania IDA, RB, VRDN, Homewood at Martinsburg Project (Manufacturers & Traders Trust Co. LOC), | 2,100 | 2,100,000 | ||||||
County of Lancaster Pennsylvania Hospital Authority, RB, VRDN, Landis Homes Retirement Community Project (Manufacturers & Traders Trust Co. LOC), 0.12%, 10/07/13 (b) | 2,490 | 2,490,000 | ||||||
County of Lycoming Pennsylvania Authority, Refunding RB, VRDN (Manufacturers & Traders Trust Co. LOC), 0.09%, 10/07/13 (b) | 4,175 | 4,175,000 | ||||||
Emmaus General Authority, RB, VRDN, Pennsylvania Loan Program, Series A (US Bank NA LOC), 0.08%, 10/07/13 (b) | 2,300 | 2,300,000 | ||||||
Pennsylvania Economic Development Financing Authority, RB, VRDN, Merck & Co., Inc., West Point Project, AMT, 0.17%, 10/07/13 (b) | 3,700 | 3,700,000 | ||||||
Pennsylvania Economic Development Financing Authority, P-FLOATS, RB, VRDN, Waste Management Inc. Project (Bank of America NA LOC), 0.19%, 10/03/13 (a)(b)(c) | 11,995 | 11,995,000 | ||||||
Pennsylvania State University, RB, VRDN, PUTTERS, Series 1971 (JPMorgan Chase Bank NA SBPA), 0.08%, 10/07/13 (a)(b)(c) | 2,900 | 2,900,000 | ||||||
Pennsylvania Turnpike Commission, ROCS, VRDN, Series II-R-11995 (Citibank NA Liquidity Agreement), 0.32%, 10/07/13 (a)(b)(c) | 7,330 | 7,330,000 | ||||||
Southcentral General Authority, RB, VRDN (Manufacturers & Traders Trust Co. LOC), 0.12%, 10/07/13 (b) | 11,130 | 11,130,000 | ||||||
|
| |||||||
| 81,780,000 | ||||||||
See Notes to Financial Statements.
| BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 | 21 |
Table of Contents
Schedule of Investments (continued) | Master Tax-Exempt LLC (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
South Carolina — 0.7% | ||||||||
South Carolina EDA, Deutsche Bank SPEARS/LIFERS Trust, Refunding RB, VRDN, Bon Secours Health System, (Deutsche Bank AG Guarantor, Deutsche Bank AG Liquidity Agreement), | $ | 4,640 | $ | 4,640,000 | ||||
South Carolina Public Service Authority, JPMorgan Chase PUTTERS/DRIVERS Trust, Refunding RB, VRDN, Series A (JPMorgan Chase Bank NA Liquidity Agreement), | 3,000 | 3,000,000 | ||||||
South Carolina State Public Service Authority, RB, VRDN, Eagle Tax-Exempt Trust, Series 2006-0007, Class A (Citibank NA SBPA), | 11,500 | 11,500,000 | ||||||
|
| |||||||
| 19,140,000 | ||||||||
Tennessee — 0.4% | ||||||||
County of Montgomery Tennessee Public Building Authority Tennessee, RB, VRDN, Tennessee County Loan Pool (Bank of America NA LOC), 0.13%, 10/07/13 (b) | 1,015 | 1,015,000 | ||||||
Metropolitan Government of Nashville & Davidson County Health & Educational Facilities Board, Refunding RB, VRDN, FLOATS, Series 3013 (Morgan Stanley Bank Liquidity Agreement), 0.10%, 10/07/13 (a)(b)(c) | 10,000 | 10,000,000 | ||||||
State of Tennessee, GO, Refunding, Series C, 5.00%, 5/01/14 | 750 | 770,439 | ||||||
|
| |||||||
| 11,785,439 | ||||||||
Texas — 15.4% | ||||||||
Brazos Harbor Industrial Development Corp., RB, VRDN, BASF Project, AMT, 0.23%, 10/07/13 (b) | 75,000 | 75,000,000 | ||||||
Brazos River Harbor Navigation District, RB, VRDN BASF Corp. Project AMT (b): | ||||||||
0.23%, 10/07/13 | 18,400 | 18,400,000 | ||||||
Brazoria County, Multi-Mode, 0.23%, 10/07/13 | 15,800 | 15,800,000 | ||||||
City of Austin Texas Water & Wastewater System Revenue, Refunding RB, VRDN, ROCS, Water and Wastewater System Revenue, | 7,205 | 7,205,000 | ||||||
City of Brownsville Texas, Deutsche Bank SPEARS/LIFERS Trust, RB, VRDN, Series A (Deutsche Bank AG Guarantor, Deutsche Bank AG Liquidity Agreement), 0.08%, 10/07/13 (b)(c) | 6,750 | 6,750,000 | ||||||
City of Houston Texas ISD, GO, 5.00%, 2/15/14 | 250 | 254,328 | ||||||
City of Houston Texas Public Improvement, JPMorgan Chase PUTTERS/DRIVERS Trust, GO, VRDN, Refunding, Series A (JPMorgan Chase Bank NA Liquidity Agreement), | 6,395 | 6,395,000 | ||||||
City of San Antonio Texas Water System Revenue, Refunding RB, VRDN, Eagle Tax-Exempt Trust, Class A, Series 3010 (Citibank NA Liquidity Agreement), 0.07%, 10/07/13 (b)(c) | 24,000 | 24,000,000 | ||||||
| Municipal Bonds | Par (000) | Value | ||||||
Texas (continued) | ||||||||
City of Sheldon Texas ISD, GO, PUTTERS, VRDN (Deutsche Bank AG Liquidity Agreement), 0.09%, 10/03/13 (a)(b)(c) | $ | 5,120 | $ | 5,120,000 | ||||
County of Harris Texas, GO, VRDN, Clipper Tax-Exempt Certificate Trust, Series 73 (State Street Bank & Trust Co. Liquidity Agreement), 0.10%, 10/07/13 (b)(c) | 10,000 | 10,000,000 | ||||||
County of Harris Texas Cultural Education Facilities Finance Corp., Refunding RB, VRDN, Methodist Hospital (b): | ||||||||
Sub-Series C-1, 0.05%, 10/01/13 | 11,100 | 11,100,000 | ||||||
Sub-Series C-2, 0.05%, 10/01/13 | 24,515 | 24,515,000 | ||||||
County of Harris Texas Health Facilities Development Corp., Refunding RB, VRDN, Methodist Hospital (b): | ||||||||
Series A-1, 0.05%, 10/01/13 | 21,000 | 21,000,000 | ||||||
Series A-2, 0.05%, 10/01/13 | 15,000 | 15,000,000 | ||||||
County of Tarrant Texas Cultural Education Facilities Finance Corp., RB, VRDN, FLOATS (a)(b)(c): | ||||||||
(Credit Suisse Liquidity Agreement), 0.07%, 10/07/13 | 12,000 | 12,000,000 | ||||||
(Morgan Stanley Liquidity Agreement), 0.10%, 10/07/13 | 36,000 | 36,000,000 | ||||||
County of Tarrant Texas Cultural Education Facilities Finance Corp., Austin Trust, Refunding RB, VRDN, Certificates of Bank of America, Series 1201 (Bank of America NA Liquidity Agreement), 0.09%, 10/07/13 (a)(b)(c) | 5,790 | 5,790,000 | ||||||
Denton ISD Texas, GO, VRDN, Building, Series 2005-A (Bank of America NA SBPA), 0.09%, 10/07/13 (b) | 2,600 | 2,600,000 | ||||||
Galveston County, GO, Refunding, (AGM), 5.25%, 2/01/14 | 475 | 482,865 | ||||||
Lamar Consolidated ISD SPEARS/LIFERS Trust, GO, Refunding, VRDN (Texas Permanent School Fund Guarantor, Deutsche Bank AG SBPA), 0.08%, 10/07/13 (b)(c) | 18,960 | 18,960,000 | ||||||
North Texas Tollway Authority, Deutsche Bank SPEARS/LIFERS Trust, Refunding RB, VRDN, 1st Tier (Deutsche Bank AG Guarantor, Deutsche Bank AG SBPA), 0.08%, 10/07/13 (b)(c) | 17,887 | 17,887,000 | ||||||
Port of Corpus Christi Authority of Nueces County, Refunding RB, VRDN, Flint Hills Resource, Series A, AMT, 0.08%, 10/07/13 (b) | 22,650 | 22,650,000 | ||||||
Port of Port Arthur Navigation District, RB, VRDN Project (b): | ||||||||
Texas Industrial Development Corp., Total Petrochemicals & Refining USA, Inc., 0.09%, 10/07/13 | 10,700 | 10,700,000 | ||||||
Total Petrochemicals, AMT, 0.12%, 10/07/13 | 15,000 | 15,000,000 | ||||||
Port of Port Arthur Navigation District, Refunding RB, VRDN Environmental Facilities Motiva Enterprises LLC Project (b): | ||||||||
0.07%, 10/01/13 | 12,500 | 12,500,000 | ||||||
Sub-Series B, 0.07%, 10/01/13 | 10,000 | 10,000,000 | ||||||
San Jacinto Texas Community College District, GO, VRDN, (Morgan Stanley Liquidity Agreement), 0.10%, 10/07/13 (a)(b) | 4,500 | 4,500,000 | ||||||
See Notes to Financial Statements.
| 22 | BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 |
Table of Contents
Schedule of Investments (continued) | Master Tax-Exempt LLC (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
Texas (concluded) | ||||||||
State of Texas, GO, VRDN (b): | ||||||||
Series B (Bank of New York NA SBPA), 0.07%, 10/07/13 | $ | 12,000 | $ | 12,000,000 | ||||
Veterans Housing Assistance Program Fund II, Series A, AMT (Landesbank Hessen-Thüringen SBPA), 0.11%, 10/07/13 | 3,210 | 3,210,000 | ||||||
Texas City Industrial Development Corp., RB, VRDN (Bank of America LOC), | 4,825 | 4,825,000 | ||||||
Texas Municipal Power Agency, Wells Fargo Stage Trust, Refunding RB, FLOATS, VRDN (Wells Fargo Bank NA Liquidity Agreement), | 5,610 | 5,610,000 | ||||||
Texas State University System, Wells Fargo Stage Trust, RB, FLOATS, VRDN (Wells Fargo Bank NA Liquidity Agreement), 0.08%, 10/07/13 (a)(b)(c) | 4,700 | 4,700,000 | ||||||
Texas Transportation Commission, RB, | 250 | 255,777 | ||||||
University of Houston, Refunding RB, Series A, 5.00%, 2/15/14 | 4,310 | 4,387,612 | ||||||
|
| |||||||
| 444,597,582 | ||||||||
Utah — 1.4% | ||||||||
City of Murray Utah, RB, VRDN, IHC Health | ||||||||
Series C (Northern Trust Co. SBPA), | 8,895 | 8,895,000 | ||||||
Series D, 0.05%, 10/01/13 | 5,400 | 5,400,000 | ||||||
County of Weber Utah, RB, VRDN, Series C (Bank of New York SBPA), 0.06%, 10/01/13 (b) | 9,000 | 9,000,000 | ||||||
State of Utah, GO, FLOATS, VRDN (Morgan Stanley Liquidity Agreement), | 8,200 | 8,200,000 | ||||||
Utah Transit Authority, RB, VRDN (AGM)(Deutsche Bank AG Liquidity Agreement), | 8,345 | 8,345,000 | ||||||
|
| |||||||
| 39,840,000 | ||||||||
Virginia — 2.7% | ||||||||
City of Alexandria Virginia IDA, RB, VRDN (b): | ||||||||
American Academy of Otolaryngology, Head and Neck Surgery Foundation, Series B (Bank of America NA LOC), | 6,310 | 6,310,000 | ||||||
Young Men’s Christian Association (Manufacturers & Traders Trust Co. LOC), 0.12%, 10/07/13 | 1,100 | 1,100,000 | ||||||
County of Arlington Virginia IDA, Refunding RB, VRDN, Woodbury Park Project, Series A (Freddie Mac Guarantor, Freddie Mac Liquidity Agreement), 0.07%, 10/07/13 (b) | 4,200 | 4,200,000 | ||||||
County of Fairfax Virginia IDA, RB, VRDN (TD Bank NA SBPA), 0.06%, 10/07/13 (b) | 7,000 | 7,000,000 | ||||||
County of Fairfax Virginia IDA, Refunding RB, VRDN, Window, Healthcare, Inova Health System, Series C, 0.15%, 4/28/14 (b) | 10,405 | 10,405,000 | ||||||
State of Virginia HDA, RB, MERLOTS, VRDN, AMT (Wells Fargo Bank NA SBPA), | 3,000 | 3,000,000 | ||||||
| Municipal Bonds | Par (000) | Value | ||||||
Virginia (concluded) | ||||||||
State of Virginia HDA, Refunding RB, MERLOTS, VRDN, AMT (Wells Fargo Bank NA SBPA), 0.24%, 10/07/13 (a)(b)(c) | $ | 2,880 | $ | 2,880,000 | ||||
Virginia College Building Authority, RB, VRDN, 21st Century College (Wells Fargo Bank NA SBPA) (b): | ||||||||
Series B, 0.04%, 10/01/13 | 14,535 | 14,535,000 | ||||||
Series C, 0.04%, 10/01/13 | 13,940 | 13,940,000 | ||||||
Virginia College Building Authority, Refunding RB, VRDN, Barclays Capital Municipal Trust Receipts, FLOATS, Series 4B (Barclays Bank PLC Liquidity Agreement), 0.14%, 10/07/13 (a)(b)(c) | 1,335 | 1,335,000 | ||||||
Virginia, State Commonwealth Transportation Board, Clipper Tax-Exempt Certificate Trust, RB, VRDN, AMT (State Street Bank & Trust Co. Liquidity Agreement), 0.07%, 10/07/13 (b)(c) | 12,160 | 12,160,000 | ||||||
Winchester IDA Virginia, Refunding RB, VRDN,(Branch Banking & Trust LOC), | 925 | 925,000 | ||||||
|
| |||||||
| 77,790,000 | ||||||||
Washington — 4.1% | ||||||||
County of King Washington, Refunding RB, Wells Fargo Stage Trust, FLOATS, VRDN (Wells Fargo Bank NA Liquidity Agreement), 0.18%, 10/07/13 (a)(b)(c) | 15,960 | 15,960,000 | ||||||
County of King Washington Sewer Revenue, Austin Trust, Refunding RB, VRDN, Series 1200 (AGM), (Bank of America NA Liquidity Agreement), | 10,000 | 10,000,000 | ||||||
Port of Tacoma Washington, ARB, VRDN, ROCS, | 9,900 | 9,900,000 | ||||||
State of Washington, JPMorgan Chase PUTTERS/DRIVERS Trust, GO, Refunding, VRDN, Series C (JPMorgan Chase Bank Liquidity Agreement), | 3,745 | 3,745,000 | ||||||
State of Washington, Wells Fargo Stage Trust, GO, FLOATS, VRDN (Wells Fargo Bank NA | 20,000 | 20,000,000 | ||||||
Washington State Health Care Facilities Authority, Austin Trust, Refunding RB, VRDN, Series 1180 (Bank of America NA Liquidity Agreement), | 5,925 | 5,925,000 | ||||||
Washington State Housing Finance Commission, RB, VRDN (b): | ||||||||
(East West Bank LOC), | 14,400 | 14,400,000 | ||||||
Series A, AMT (Freddie Liquidity Agreement), 0.10%, 10/07/13 | 31,500 | 31,500,000 | ||||||
Washington State University, JPMorgan Chase PUTTERS/DRIVERS Trust, RB, VRDN, Student Fee Bonds, Series A, (Deutsche Bank AG Liquidity Agreement), 0.09%, 10/07/13 (a)(b)(c) | 7,540 | 7,540,000 | ||||||
|
| |||||||
| 118,970,000 | ||||||||
West Virginia — 0.2% | ||||||||
West Virginia EDA, RB, VRDN (Sumitomo Mitsui Trust Bank Ltd. LOC), 0.07%, 10/07/13 (b) | 5,800 | 5,800,000 | ||||||
See Notes to Financial Statements.
| BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 | 23 |
Table of Contents
Schedule of Investments (continued) | Master Tax-Exempt LLC (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) | Value | ||||||
Wisconsin — 4.6% | ||||||||
State of Wisconsin, ECN, TECP: | ||||||||
0.12%, 11/06/13 | $ | 13,500 | $ | 13,500,000 | ||||
0.11%, 11/07/13 | 34,635 | 34,635,000 | ||||||
0.13%, 12/05/13 | 36,200 | 36,200,000 | ||||||
State of Wisconsin, GO, Refunding, (NPFGC), 5.50%, 5/01/14 | 565 | 582,065 | ||||||
State of Wisconsin, Petroleum Inspection Fee, TECP: | ||||||||
0.14%, 10/01/13 | 5,000 | 5,000,000 | ||||||
0.16%, 12/04/13 | 6,650 | 6,650,000 | ||||||
0.13%, 12/05/13 | 17,000 | 17,000,000 | ||||||
State of Wisconsin, RB, 5.00%, 6/01/14 | 750 | 773,402 | ||||||
Village of Kohler Wisconsin, RB, VRDN, Kohler Co. Project, AMT (Wells Fargo Bank NA LOC), | 4,000 | 4,000,000 | ||||||
West Bend Housing Authority, RB, VRDN, AMT (US Bank NA LOC), 0.14%, 10/07/13 (b) | 5,165 | 5,165,000 | ||||||
| Municipal Bonds | Par (000) | Value | ||||||
Wisconsin (concluded) | ||||||||
Wisconsin Health & Educational Facilities Authority, RB, ROCS, VRDN, Series II_R-14065 | $ | 3,000 | $ | 3,000,000 | ||||
Wisconsin Health & Educational Facilities Authority, Refunding RB, VRDN, Ascension Health Alliance Senior Credit Group, | 5,800 | 5,800,000 | ||||||
|
| |||||||
| 132,305,467 | ||||||||
Wyoming — 0.2% | ||||||||
Converse County, Refunding RB, VRDN, PacifiCorp Projects (Bank of Nova Scotia LOC), | 6,485 | 6,485,000 | ||||||
| Total Investments (Cost — $2,903,638,356*) — 100.5% | 2,903,638,356 | |||||||
| Liabilities in Excess of Other Assets — (0.5)% | (13,202,162 | ) | ||||||
|
| |||||||
Net Assets — 100.0% | $ | 2,890,436,194 | ||||||
|
| |||||||
| Notes to Schedule of Investments |
| * | Cost for federal income tax purposes. |
| (a) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors. |
| (b) | Variable rate security. Rate shown is as of report date and maturity shown is the date the principal owed can be recovered through demand. |
| (c) | These securities are short-term floating rate certificates issued by tender option bond trusts and are secured by the underlying municipal bond securities. |
| (d) | US government securities, held in escrow, are used to pay interest on this security, as well as to retire the bond in full at the date indicated, typically at a premium to par. |
| (e) | When-issued security. Unsettled when-issued transactions were as follows: |
| Counterparty | Value | Unrealized Appreciation | ||||||
J.P. Morgan Securities LLC | $ | 18,489,792 | — | |||||
Janney Montgomery Scott LLC | $ | 7,022,400 | — | |||||
Stephens, Inc. | $ | 1,823,346 | — | |||||
| Ÿ | Fair Value Measurements — Various inputs are used in determining the fair value of investments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes as follows: |
| Ÿ | Level 1 — unadjusted price quotations in active markets/exchanges for identical assets or liabilities that the Master LLC has the ability to access |
| Ÿ | Level 2 — other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs) |
| Ÿ | Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Master LLC’s own assumptions used in determining the fair value of investments) |
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Master LLC’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments is based on the pricing transparency of the investment and is not necessarily an indication of the risks associated with investing in those securities. For information about the Master LLC’s policy regarding valuation of investments, please refer to Note 2 of the Notes to Financial Statements.
See Notes to Financial Statements.
| 24 | BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 |
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Schedule of Investments (concluded) | Master Tax-Exempt LLC |
The following table summarizes the Master LLC’s investments categorized in the disclosure hierarchy as of September 30, 2013:
| Level 1 | Level 2 | Level 3 | Total | |||||||||
Assets: | ||||||||||||
| Investments: | ||||||||||||
Municipal Bonds1 | — | $ | 2,903,638,356 | — | $ | 2,903,638,356 | ||||||
| 1 | See above Schedule of Investments for values in each state or political subdivision. |
Certain of the Master LLC’s assets are held at carrying amount, which approximates fair value for financial statement purposes. As of September 30, 2013, cash of $555,915 is categorized as Level 1 within the disclosure hierarchy.
There were no transfers between levels during the six months ended September 30, 2013.
See Notes to Financial Statements.
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| Statement of Assets and Liabilities |
| September 30, 2013 (Unaudited) | Master Tax-Exempt LLC | |
| Assets | ||||
Investments at value — unaffiliated (cost — $2,903,638,356) | $ | 2,903,638,356 | ||
Cash | 555,915 | |||
Contributions receivable from investors | 8,522,421 | |||
Investments sold receivable | 3,400,124 | |||
Interest receivable | 1,889,514 | |||
Prepaid expenses | 30,323 | |||
|
| |||
Total assets | 2,918,036,653 | |||
|
| |||
| Liabilities | ||||
Investments purchased payable | 27,335,638 | |||
Investment advisory fees payable | 119,421 | |||
Directors’ fees payable | 32,076 | |||
Other affiliates payable | 7,776 | |||
Other accrued expenses payable | 105,548 | |||
|
| |||
Total liabilities | 27,600,459 | |||
|
| |||
Net Assets | $ | 2,890,436,194 | ||
|
| |||
| Net Assets Consist of | ||||
Investors’ capital | $ | 2,890,436,194 | ||
|
|
| Statement of Operations |
| Six Months Ended September 30, 2013 (Unaudited) | Master Tax-Exempt LLC | |
| Investment Income | ||||
Income | $ | 2,448,724 | ||
|
| |||
| Expenses | ||||
Investment advisory | 2,297,736 | |||
Accounting services | 87,460 | |||
Directors | 60,864 | |||
Custodian | 36,808 | |||
Professional | 32,877 | |||
Printing | 1,309 | |||
Miscellaneous | 68,636 | |||
|
| |||
Total expenses | 2,585,690 | |||
Less fees waived by Manager | (1,244,331 | ) | ||
|
| |||
Total expenses after fees waived | 1,341,359 | |||
|
| |||
Net investment income | 1,107,365 | |||
|
| |||
| Realized Gain | ||||
Net realized gain from investments | 104,899 | |||
|
| |||
Net Increase in Net Assets Resulting from Operations | $ | 1,212,264 | ||
|
|
See Notes to Financial Statements.
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| Statements of Changes in Net Assets | Master Tax-Exempt LLC |
| Increase (Decrease) in Net Assets: | Six Months Ended September 30, 2013 (Unaudited) | Year Ended March 31, | ||||||
| Operations | ||||||||
Net investment income | $ | 1,107,365 | $ | 4,898,897 | ||||
Net realized gain | 104,899 | 65,548 | ||||||
|
| |||||||
Net increase in net assets resulting from operations | 1,212,264 | 4,964,445 | ||||||
|
| |||||||
| Capital Transactions | ||||||||
Proceeds from contributions | 6,339,695,458 | 15,107,389,487 | ||||||
Value of withdrawals | (6,523,573,374 | ) | (15,668,329,378 | ) | ||||
|
| |||||||
Net decrease in net assets derived from capital transactions | (183,877,916 | ) | (560,939,891 | ) | ||||
|
| |||||||
| Net Assets | ||||||||
Total decrease in net assets | (182,665,652 | ) | (555,975,446 | ) | ||||
Beginning of period | 3,073,101,846 | 3,629,077,292 | ||||||
|
| |||||||
End of period | $ | 2,890,436,194 | $ | 3,073,101,846 | ||||
|
| |||||||
| Financial Highlights | Master Tax-Exempt LLC |
| Six Months Ended September 30, 2013 (Unaudited) | Year Ended March 31, | |||||||||||||||||||||||
| 2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||||||
| Total Investment Return | ||||||||||||||||||||||||
Total investment return | 0.04% | 1 | 0.15% | 0.10% | 0.25% | 0.42% | 1.68% | |||||||||||||||||
|
| |||||||||||||||||||||||
| Ratios to Average Net Assets | ||||||||||||||||||||||||
Total expenses | 0.17% | 2 | 0.17% | 0.17% | 0.16% | 0.15% | 0.15% | |||||||||||||||||
|
| |||||||||||||||||||||||
Total expenses after fees waived | 0.09% | 2 | 0.08% | 0.14% | 0.16% | 0.15% | 0.15% | |||||||||||||||||
|
| |||||||||||||||||||||||
Net investment income | 0.07% | 2 | 0.15% | 0.12% | 0.26% | 0.43% | 1.67% | |||||||||||||||||
|
| |||||||||||||||||||||||
| Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 2,890,436 | $ | 3,073,102 | $ | 3,629,077 | $ | 4,383,330 | $ | 6,495,521 | $ | 11,363,478 | ||||||||||||
|
| |||||||||||||||||||||||
| 1 | Aggregate total investment return. |
| 2 | Annualized. |
| See Notes to Financial Statements. | ||||||
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Table of Contents
| Notes to Financial Statements (Unaudited) | Master Tax-Exempt LLC |
1. Organization:
Master Tax-Exempt LLC (the “Master LLC”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), and is organized as a Delaware limited liability company. The Master LLC’s Limited Liability Company Agreement permits the Board of Directors of the Master LLC (the “Board”) to issue non-transferable interests in the Master LLC, subject to certain limitations.
2. Significant Accounting Policies:
The Master LLC’s financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the Master LLC:
Valuation: US GAAP defines fair value as the price the Master LLC would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Master LLC’s investments are valued under the amortized cost method, which approximates current market value in accordance with Rule 2a-7 under the 1940 Act. Under this method, investments are valued at cost when purchased and thereafter, a constant proportionate accretion of discounts and amortization of premiums are recorded until the maturity of the security.
Investment Transactions and Investment Income: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on investment transactions are determined on the identified cost basis. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on the accrual basis.
Income Taxes: The Master LLC is classified as a partnership for federal income tax purposes. As such, each investor in the Master LLC is treated as the owner of its proportionate share of net assets, income, expenses and realized and unrealized gains and losses of the Master LLC. Therefore, no federal income tax provision is required. It is intended that the Master LLC’s assets will be managed so an investor in the Master LLC can satisfy the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended.
The Master LLC files US federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Master LLC’s US federal tax returns remains open for each of the four years ended March 31, 2013. The statutes of limitations on the Master LLC’s state and local tax returns may remain open for an additional year depending upon the jurisdiction. Management does not believe there are any uncertain tax positions that require recognition of a tax liability.
Other: Expenses directly related to the Master LLC are charged to the Master LLC. Other operating expenses shared by several funds are pro rated among those funds on the basis of relative net assets or other appropriate methods.
The Master LLC has an arrangement with the custodian whereby fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statement of Operations. The custodian imposes fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.
3. Investment Advisory Agreement and Other Transactions with Affiliates:
The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate, for 1940 Act purpose of BlackRock, Inc. (“BlackRock”).
The Master LLC entered into an Investment Advisory Agreement with BlackRock Advisors, LLC (the “Manager”), the Master LLC’s investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory and administration services. The Manager is responsible for the management of the Master LLC’s portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of the Master LLC. For such services, the Master LLC pays the Manager a monthly fee based on a percentage of the Master LLC’s average daily net assets at the following annual rates:
| Average Daily Net Assets | Investment Advisory Fee | |||
First $500 Million | 0.250 | % | ||
$500 Million — $1 Billion | 0.175 | % | ||
Greater than $1 Billion | 0.125 | % | ||
The Manager entered into a sub-advisory agreement with BlackRock Investment Management, LLC (“BIM”), an affiliate of the Manager. The Manager pays BIM, for services it provides, a monthly fee that is a percentage of the investment advisory fees paid by the Master LLC to the Manager.
The Manager voluntarily agreed to waive a portion of the advisory fees and/or reimburse operating expenses of the Master LLC to enable the feeder funds that invest in the Master LLC to maintain minimum levels of net investment income. These amounts, if any, are reported in the Statement of Operations as fees waived by Manager.
For the six months ended September 30, 2013, the Master LLC reimbursed the Manager $14,588 for certain accounting services, which is included in accounting services in the Statement of Operations.
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| Notes to Financial Statements (concluded) | Master Tax-Exempt LLC |
Certain officers and/or directors of the Master LLC are officers and/or directors of BlackRock or its affiliates.
4. Market and Credit Risk:
In the normal course of business, the Master LLC invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations (issuer credit risk). The value of securities held by the Master LLC may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Master LLC; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to issuer credit risk, the Master LLC may be exposed to counterparty credit risk, or the risk that an entity with which the Master LLC has unsettled or open transactions may fail to or be unable to perform on its commitments. The Master LLC manages counterparty credit risk by entering into transactions only with counterparties that it believes has the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Master LLC to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Master LLC’s exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Master LLC.
Certain obligations held by the Master LLC have a credit enhancement or liquidity feature that may, under certain circumstances, provide for repayment of principal and interest on the obligation when due. These enhancements, which may include letters of credit, stand-by bond purchase agreements and/or third party insurance, are issued by financial institutions. The value of the obligations may be affected by changes in credit worthiness of the entities that provide the credit enhancements or liquidity features. The Master LLC monitors its exposure by reviewing the credit worthiness of the issuers, as well as the financial institutions issuing the credit enhancements and by limiting the amount of holdings with credit enhancements from one financial institution.
5. Subsequent Events:
Management has evaluated the impact of all subsequent events on the Master LLC through the date the financial statements were issued and has determined that there were no subsequent events requiring adjustment or additional disclosure in the financial statements.
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Table of Contents
| Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement |
The Board of Directors of Master Tax-Exempt LLC (the “Master LLC”) met in person on April 11, 2013 (the “April Meeting”) and May 20-22, 2013 (the “May Meeting”) to consider the approval of the Master LLC’s investment advisory agreement (the “Agreement”) with BlackRock Advisors, LLC (the “Manager” or “BlackRock”), the Master LLC’s investment advisor. BBIF Tax-Exempt Fund (the “Fund”) is a “feeder” fund that invests all of its investable assets in the Master LLC. Accordingly, the Board of Trustees of the Fund also considered the approval of the Agreement. For simplicity, (a) the Board of Directors of the Master LLC and the Board of Trustees of the Fund are referred to herein collectively as the “Board,” and the members are referred to as “Board Members,” and (b) the shareholders of the Fund and the interest holders of the Master LLC are referred to as “shareholders.”
Activities and Composition of the Board
The Board consists of fourteen individuals, twelve of whom are not “interested persons” of the Master LLC or the Fund as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Board Members”). The Board Members are responsible for the oversight of the operations of the Master LLC or the Fund, as pertinent, and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Board Members have retained independent legal counsel to assist them in connection with their duties. The Co-Chairs of the Board are each Independent Board Members. The Board has established five standing committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee, a Performance Oversight and Contract Committee and an Executive Committee, each of which is chaired by an Independent Board Member and composed of Independent Board Members (except for the Executive Committee, which also has one interested Board Member).
The Agreement
Pursuant to the 1940 Act, the Board is required to consider the continuation of the Agreement on an annual basis. The Board has four quarterly meetings per year, each extending over two or three days, and a fifth one-day meeting to consider specific information surrounding the consideration of renewing the Agreement. In connection with this process, the Board assessed, among other things, the nature, scope and quality of the services provided to the Master LLC and the Fund by BlackRock, its personnel and its affiliates, including investment management, administrative and shareholder services, oversight of fund accounting and custody, marketing services, risk oversight, compliance and assistance in meeting applicable legal and regulatory requirements.
The Board, acting directly and through its committees, considers at each of its meetings, and from time to time as appropriate, factors that are relevant to its annual consideration of the renewal of the Agreement, including the services and support provided by BlackRock to the Master LLC, the Fund and their shareholders. Among the matters the Board considered were: (a) investment performance for one-year, three-year, five-year and/or since inception periods, as applicable, against peer funds, and applicable benchmarks, if any, as well as senior management’s and portfolio managers’ analysis of the reasons for any over performance or underperformance against its peers and/or benchmark, as applicable; (b) fees, including advisory, administration, if applicable, and other amounts paid to BlackRock and its affiliates by the Master LLC and/or the Fund for services, such as marketing and distribution, call center and fund accounting; (c) the Master LLC’s and/or the Fund’s operating expenses and how BlackRock allocates expenses to the Master LLC and the Fund; (d) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of the Master LLC’s and the Fund’s investment objective, policies and restrictions; (e) the Master LLC’s and the Fund’s compliance with its respective Code of Ethics and other compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls and risk and compliance oversight mechanisms; (h) BlackRock’s implementation of the proxy voting policies approved by the Board; (i) execution quality of portfolio transactions; (j) BlackRock’s implementation of the Master LLC’s and/or the Fund’s valuation and liquidity procedures; (k) an analysis of management fees for products with similar investment objectives across the open-end fund, exchange-traded fund (“ETF”), closed-end fund and institutional account product channels, as applicable; (l) BlackRock’s compensation methodology for its investment professionals and the incentives it creates; and (m) periodic updates on BlackRock’s business.
The Board has engaged in an ongoing strategic review with BlackRock of opportunities to consolidate funds and of BlackRock’s commitment to investment performance. In addition, the Board requested and BlackRock provided an analysis of fair valuation and stale pricing policies. BlackRock also furnished information to the Board in response to specific questions. These questions covered issues such as BlackRock’s profitability, investment performance and management fee levels. The Board further considered the importance of: (i) organizational and structural variables to investment performance; (ii) rates of portfolio turnover; (iii) BlackRock’s performance accountability for portfolio managers; (iv) marketing support for the funds; (v) services provided to the Master LLC and the Fund by BlackRock affiliates; and (vi) BlackRock’s oversight of relationships with third party service providers.
Board Considerations in Approving the Agreement
The Approval Process: Prior to the April Meeting, the Board requested and received materials specifically relating to the Agreement. The Board is engaged in a process with its independent legal counsel and BlackRock to review the nature and scope of the information provided
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| Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement (continued) |
to better assist its deliberations. The materials provided in connection with the April Meeting included (a) information independently compiled and prepared by Lipper, Inc. (“Lipper”) on fees and expenses of the Master LLC and the Fund, as applicable, as compared with a peer group of funds as determined by Lipper (“Expense Peers”) and the investment performance of the Fund as compared with a peer group of funds as determined by Lipper1; (b) information on the profits realized by BlackRock and its affiliates pursuant to the Agreement and a discussion of fall-out benefits to BlackRock and its affiliates; (c) a general analysis provided by BlackRock concerning investment management fees charged to other clients, such as institutional clients, ETFs and closed-end funds, under similar investment mandates, as well as the performance of such other clients, as applicable; (d) review of non-management fees; (e) the existence, impact and sharing of potential economies of scale; (f) a summary of aggregate amounts paid by the Master LLC and/or the Fund to BlackRock; (g) sales and redemption data regarding the Fund’s shares; and (h) if applicable, a comparison of management fees to similar BlackRock open-end funds, as classified by Lipper.
At the April Meeting, the Board reviewed materials relating to its consideration of the Agreement. As a result of the discussions that occurred during the April Meeting, and as a culmination of the Board’s year-long deliberative process, the Board presented BlackRock with questions and requests for additional information. BlackRock responded to these requests with additional written information in advance of the May Meeting.
At the May Meeting, the Board of the Master LLC, including the Independent Board Members, unanimously approved the continuation of the Agreement for a one-year term ending June 30, 2014. The Board of the Fund, including the Independent Board Members, also considered the continuation of the Agreement and found the Agreement to be satisfactory. In approving the continuation of the Agreement, the Board of the Master LLC considered: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of the Master LLC, the Fund and BlackRock; (c) the advisory fee and the cost of the services and profits to be realized by BlackRock and its affiliates from their relationship with the Master LLC and the Fund; (d) the Fund’s costs to investors compared to the costs of its Expense Peers and the Fund’s performance compared to the relevant performance metric as previously discussed; (e) economies of scale; (f) fall-out benefits to BlackRock as a result of its relationship with the Master LLC and the Fund; and (g) other factors deemed relevant by the Board Members.
The Board also considered other matters it deemed important to the approval process, such as payments made to BlackRock or its affiliates relating to the distribution of Fund shares and securities lending, services related to the valuation and pricing of portfolio holdings of the Master LLC, direct and indirect benefits to BlackRock and its affiliates from their relationship with the Master LLC and the Fund and advice from independent legal counsel with respect to the review process and materials submitted for the Board’s review. The Board noted the willingness of BlackRock personnel to engage in open, candid discussions with the Board. The Board did not identify any particular information as determinative, and each Board Member may have attributed different weights to the various items considered.
A. Nature, Extent and Quality of the Services Provided by BlackRock: The Board, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of the Fund. Throughout the year, the Board compared the Fund’s performance to the performance of a comparable group of mutual funds and/or the performance of a relevant benchmark, if any. The Board met with BlackRock’s senior management personnel responsible for investment operations, including the senior investment officers. The Board also reviewed the materials provided by the Master LLC’s portfolio management team discussing the Master LLC’s performance and the Master LLC’s investment objective, strategies and outlook.
The Board considered, among other factors, with respect to BlackRock: the number, education and experience of investment personnel generally and the Master LLC’s portfolio management team; investments by portfolio managers in the funds they manage; portfolio trading capabilities; use of technology; commitment to compliance; credit analysis capabilities; risk analysis and oversight capabilities; and the approach to training and retaining portfolio managers and other research, advisory and management personnel. The Board engaged in a review of BlackRock’s compensation structure with respect to the Master LLC’s portfolio management team and BlackRock’s ability to attract and retain high-quality talent and create performance incentives.
In addition to advisory services, the Board considered the quality of the administrative and other non-investment advisory services provided to the Master LLC and the Fund. BlackRock and its affiliates provide the Master LLC and the Fund with certain administrative, shareholder and other services (in addition to any such services provided to the Master LLC and the Fund by third parties) and officers and other personnel as are necessary for the operations of the Master LLC and the Fund. In particular, BlackRock and its affiliates provide the Master LLC and the Fund with the following administrative services, including, among others: (i) preparing disclosure documents, such as the prospectus, the summary prospectus (as applicable), the statement of additional information and periodic shareholder reports; (ii) assisting with daily accounting and pricing; (iii) overseeing and coordinating the activities of other service providers; (iv) organizing Board meetings and preparing the materials for such Board meetings; (v) providing legal and
| 1 | Lipper ranks funds in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable. |
| BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 | 31 |
Table of Contents
| Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement (continued) |
compliance support; (vi) furnishing analytical and other support to assist the Board in its consideration of strategic issues such as the merger or consolidation of certain open-end funds; and (vii) performing other administrative functions necessary for the operation of the Master LLC and the Fund, such as tax reporting, fulfilling regulatory filing requirements and call center services. The Board reviewed the structure and duties of BlackRock’s fund administration, shareholder services, legal and compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations.
B. The Investment Performance of the Master LLC, the Fund and BlackRock: The Board, including the Independent Board Members, also reviewed and considered the performance history of the Master LLC and the Fund, as applicable. The Board noted that the Fund’s investment results correspond directly to the investment results of the Master LLC. In preparation for the April Meeting, the Board worked with its independent legal counsel, BlackRock and Lipper to develop a template for, and was provided with, reports independently prepared by Lipper, which included a comprehensive analysis of the Fund’s performance. The Board also reviewed a narrative and statistical analysis of the Lipper data that was prepared by BlackRock, which analyzed various factors that affect Lipper’s rankings. In connection with its review, the Board received and reviewed information regarding the investment performance of the Fund as compared to other funds in its applicable Lipper category. The Board was provided with a description of the methodology used by Lipper to select peer funds and periodically meets with Lipper representatives to review its methodology. The Board and its Performance Oversight and Contract Committee regularly review, and meet with Master LLC management to discuss, the performance of the Master LLC and the Fund, as applicable, throughout the year.
The Board noted that the Fund ranked in the third, first and first quartiles against its Lipper Performance Universe for the one-, three- and five-year periods reported, respectively. The Board also noted that the Fund performed within the one basis point threshold of its Lipper Performance Universe peer median for the one-year period. The Board reviewed the Fund’s performance within the context of the low yield environment that has existed over the past few years.
The quartile standing of the Fund in its Lipper peer group takes into account the Fund’s current yield only. The Board believes that the true performance of a money market fund can only be understood in its multi-dimensional context, accounting for not only current yield but also risk. While the Board reviews the Fund’s current yield performance, it also examines the liquidity, duration, and credit quality of the Master LLC’s portfolio. In the Board’s view, BlackRock’s money market funds have performed well over the one, three and five year periods given BlackRock’s emphasis on preserving capital and on balancing the quest for current yield against various measures of risk.
The Board noted that BlackRock has recently made, and continues to make, changes to the organization of BlackRock’s overall portfolio management structure designed to result in strengthened leadership teams.
C. Consideration of the Advisory/Management Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Master LLC and the Fund: The Board, including the Independent Board Members, reviewed the Master LLC’s/Fund’s contractual management fee rate compared with the other funds in the Fund’s Lipper category. The contractual management fee rate represents a combination of the advisory fee and any administrative fees, before taking into account any reimbursements or fee waivers. The Board also compared the Fund’s total net operating expense ratio, as well as the Master LLC’s/Fund’s actual management fee rate, to those of other funds in the Fund’s Lipper category. The total net operating expense ratio and actual management fee rate both give effect to any expense reimbursements or fee waivers that benefit the funds. The Board considered the services provided and the fees charged by BlackRock to other types of clients with similar investment mandates, including institutional accounts.
The Board received and reviewed statements relating to BlackRock’s financial condition. The Board was also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to the Master LLC and the Fund. The Board reviewed BlackRock’s profitability with respect to the Master LLC and the Fund, as applicable, and other funds the Board currently oversees for the year ended December 31, 2012 compared to available aggregate profitability data provided for the two prior years. The Board reviewed BlackRock’s profitability with respect to certain other fund complexes managed by the Manager and/or its affiliates. The Board reviewed BlackRock’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Board recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, precision of expense allocations and business mix. As a result, comparing profitability is difficult.
The Board noted that, in general, individual fund or product line profitability of other advisors is not publicly available. The Board reviewed BlackRock’s overall operating margin, in general, compared to that of certain other publicly-traded asset management firms. The Board considered the differences between BlackRock and these other firms, including the contribution of technology at BlackRock, BlackRock’s expense management and the relative product mix.
In addition, the Board considered the cost of the services provided to the Master LLC and the Fund by BlackRock, and BlackRock’s and its
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| Disclosure of Investment Advisory Agreement and Sub-Advisory Agreement (concluded) |
affiliates’ profits relating to the management and distribution of the Master LLC and the Fund and the other funds advised by BlackRock and its affiliates. As part of its analysis, the Board reviewed BlackRock’s methodology in allocating its costs to the management of the Master LLC and the Fund. The Board also considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreement and to continue to provide the high quality of services that is expected by the Board.
The Board noted that the Master LLC’s/Fund’s contractual management fee rate ranked in the fourth quartile relative to the Fund’s Expense Peers. The Board also noted that the Master LLC’s/Fund’s actual management fee rate ranked in the third quartile relative to the Feeder Fund’s Expense Peers. The Board reviewed the Master LLC’s/Fund’s expenses within the context of the low yield environment and consequent expense waivers and reimbursements. The Board further noted that the Master LLC has an advisory fee arrangement that includes breakpoints that adjust the fee rate downward as the size of the Master LLC increases above certain contractually specified levels. The Board additionally noted that the Manager, in its capacity as the Fund’s administrator (the “Administrator”), and the Fund’s distributor have entered into a contractual arrangement with the Fund whereby the Administrator and the distributor agreed to waive all or a portion of their respective fees and/or reimburse direct expenses of the Fund to ensure that the net operating expense ratio for certain classes of shares did not exceed specified amounts. The Board additionally noted that, to enable the Master LLC/Fund to maintain minimum levels of daily net investment income, BlackRock and the Fund’s distributor have voluntarily agreed to reduce the Master LLC’s/Fund’s expenses as necessary. These waivers and reimbursements may be discontinued at any time without notice.
D. Economies of Scale: The Board, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of the Master LLC and the Fund increase, as well as the existence of expense caps, as applicable. The Board also considered the extent to which the Master LLC and the Fund benefit from such economies and whether there should be changes in the advisory fee rate or breakpoint structure in order to enable the Master LLC and the Fund to participate in these economies of scale, for example through the use of revised breakpoints in the advisory fee based upon the asset level of the Master LLC. In its consideration, the Board took into account the existence of any expense caps and further considered the continuation and/or implementation, as applicable, of such caps.
E. Other Factors Deemed Relevant by the Board Members: The Board, including the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from their respective relationships with the Master LLC and the Fund, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios and risk management personnel, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to the Master LLC and the Fund, including for administrative, distribution, securities lending and cash management services. The Board also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Board also noted that BlackRock may use and benefit from third party research obtained by soft dollars generated by certain registered fund transactions to assist in managing all or a number of its other client accounts.
In connection with its consideration of the Agreement, the Board also received information regarding BlackRock’s brokerage and soft dollar practices. The Board received reports from BlackRock which included information on brokerage commissions and trade execution practices throughout the year.
The Board noted the competitive nature of the open-end fund marketplace, and that shareholders are able to redeem their Fund shares if they believe that the Fund’s and/or the Master LLC’s fees and expenses are too high or if they are dissatisfied with the performance of the Fund.
Conclusion
The Board of the Master LLC, including the Independent Board Members, unanimously approved the continuation of the Agreement for a one-year term ending June 30, 2014. Based upon its evaluation of all of the aforementioned factors in their totality, the Board of the Master LLC, including the Independent Board Members, was satisfied that the terms of the Agreement were fair and reasonable and in the best interest of the Master LLC and its shareholders. The Board of the Fund, including the Independent Board Members, also considered the continuation of the Agreement and found the Agreement to be satisfactory. In arriving at its decision to approve the Agreement, the Board of the Master LLC did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making this determination. The contractual fee arrangements for the Master LLC reflect the results of several years of review by the Board Members and predecessor Board Members, and discussions between such Board Members (and predecessor Board Members) and BlackRock. As a result, the Board Members’ conclusions may be based in part on their consideration of these arrangements in prior years.
| BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 | 33 |
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| Officers and Directors |
Ronald W. Forbes, Co-Chairman of the Board and Director
Rodney D. Johnson, Co-Chairman of the Board and Director
Paul L. Audet, Director
David O. Beim, Director
Henry Gabbay, Director
Dr. Matina S. Horner, Director
Herbert I. London, Director
Ian A. MacKinnon, Director
Cynthia A. Montgomery, Director
Joseph P. Platt, Director
Robert C. Robb, Jr., Director
Toby Rosenblatt, Director
Kenneth L. Urish, Director
Frederick W. Winter, Director
John M. Perlowski, President and Chief Executive Officer
Richard Hoerner, CFA, Vice President
Brendan Kyne, Vice President
Christopher Stavrakos, CFA, Vice President
Neal Andrews, Chief Financial Officer
Jay Fife, Treasurer
Brian Kindelan, Chief Compliance Officer and Anti-Money Laundering Officer
Benjamin Archibald, Secretary
Investment Advisor and Administrator
BlackRock Advisors, LLC
Wilmington, DE 19809
Sub-Advisor
BlackRock Investment Management, LLC
Princeton, NJ 08540
Custodian and Accounting Agent
State Street Bank and Trust Company
Boston, MA 02110
Transfer Agent
Financial Data Services, Inc.
Jacksonville, FL 32246
Distributor
BlackRock Investments, LLC
New York, NY 10022
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
Boston, MA 02116
Legal Counsel
Sidley Austin LLP
New York, NY 10019
Address of the Fund
100 Bellevue Parkway
Wilmington, DE 19809
| 34 | BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 |
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| Additional Information |
| General Information |
Electronic Delivery
Electronic copies of most financial reports and prospectuses are available on the Fund’s website or shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports and prospectuses by enrolling in the Fund’s electronic delivery program.
Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:
Please contact your financial advisor to enroll. Please note that not all investment advisors, banks or brokerages may offer this service.
Householding
The Fund will mail only one copy of shareholder documents, including prospectuses, annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call the Transfer Agent at (800) 221-7210.
Availability of Quarterly Schedule of Investments
The Fund/Master LLC file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s/Master LLC’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Fund’s/Master LLC’s Forms N-Q may also be obtained upon request and without charge by calling (800) 626-1960.
Availability of Proxy Voting Policies and Procedures
A description of the policies and procedures that the Fund/Master LLC use to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling (800) 626-1960; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.
Availability of Proxy Voting Record
Information about how the Fund/Master LLC voted proxies relating to securities held in the Fund’s/Master LLC’s portfolio during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 626-1960 and (2) on the SEC’s website at http://www.sec.gov.
| BlackRock Privacy Principles |
BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.
If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.
BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.
BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.
We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.
| BBIF TAX-EXEMPT FUND | SEPTEMBER 30, 2013 | 35 |
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This report is transmitted to shareholders only. It is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Fund unless accompanied or preceded by the Fund’s current prospectus. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. Total return information assumes reinvestment of all distributions. Past performance results shown in this report should not be considered a representation of future performance. Current performance may be higher or lower than the performance data quoted. For current month-end performance information, call (800) 626-1960. The Fund’s current 7-day yield more closely reflects the current earnings of the Fund than the total returns quoted. Statements and other information herein are as dated and are subject to change.
| BBIFTE-9/13-SAR | ||
 | ||
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Item 2 – Code of Ethics – Not Applicable to this semi-annual report
Item 3 – Audit Committee Financial Expert – Not Applicable to this semi-annual report
Item 4 – Principal Accountant Fees and Services – Not Applicable to this semi-annual report
Item 5 – Audit Committee of Listed Registrants – Not Applicable
Item 6 – Investments
(a) The registrants’ Schedules of Investments are included as part of the Report to Stockholders filed under Item 1 of this Form.
(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.
| Item 7 – | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not Applicable |
| Item 8 – | Portfolio Managers of Closed-End Management Investment Companies – Not Applicable |
| Item 9 – | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable |
| Item 10 – | Submission of Matters to a Vote of Security Holders –There have been no material changes to these procedures. |
| Item 11 | – Controls and Procedures |
(a) – The registrants’ principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrants’ disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended.
(b) – There were no changes in the registrants’ internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrants’ internal control over financial reporting.
Item 12 – Exhibits attached hereto
(a)(1) – Code of Ethics – Not Applicable to this semi-annual report
(a)(2) – Certifications – Attached hereto
(a)(3) – Not Applicable
(b) – Certifications – Attached hereto
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, each registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| BBIF Tax-Exempt Fund and Master Tax-Exempt LLC | ||
| By: | /s/ John M. Perlowski | |
| John M. Perlowski | ||
| Chief Executive Officer (principal executive officer) of BBIF Tax-Exempt Fund and Master Tax-Exempt LLC | ||
Date: December 3, 2013
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of each registrant and in the capacities and on the dates indicated.
| By: | /s/ John M. Perlowski | |
| John M. Perlowski | ||
| Chief Executive Officer (principal executive officer) of BBIF Tax-Exempt Fund and Master Tax-Exempt LLC |
Date: December 3, 2013
| By: | /s/ Neal J. Andrews | |
| Neal J. Andrews | ||
| Chief Financial Officer (principal financial officer) of BBIF Tax-Exempt Fund and Master Tax-Exempt LLC |
Date: December 3, 2013
3